Cryptocurrency exchanges are online platforms where one can buy, sell, or trade cryptocurrencies. The aim of crypto exchanges is to connect buyers and sellers by creating a cycle of supply and demand in one place.
Centralized vs Decentralized Exchanges
However, almost every exchange is prone to hacking, has privacy issues, and users could end up losing their funds. Non-custodial exchange services look to overcome these shortcomings of cryptocurrency exchanges.
Online cryptocurrency exchanges can be categorized into two types: centralized and decentralized.
Centralized exchanges allow you to sign up with your email and password and usually have extra security features like two-step authentication or email verification.
Even though they make it easier for everyday users to buy and sell digital assets with their interactive interface, one major downside of such exchanges is that they do not give users full control of their cryptocurrencies. The private keys of your wallets are held with the exchanges, so if they were to get hacked, your funds will be lost.
Decentralized exchanges (DEXs) give users more control over their assets as they only act as intermediaries and do not store private keys giving the users full control of their funds. However, these exchanges come up with their own drawbacks such as low liquidity, slow UI, and not being able to handle huge amounts of transactions, etc. There are a very few DEXs compared to CEXs owing to the difficulty that users face while using the former due to complex UI. This is where an instant crypto exchange comes in – users can instantly trade their digital currencies in just 3 simple steps without the hassle of needing to register or worrying constantly about security.
Generally, people prefer CEX over a DEX because of a number of
