Those who are regular contributors on Hive may now be aware of the Hive-engine. It is a decentralized exchange where we sell our tokens like #cine, #pob or #leofinance. Those who wish to buy the stakes in the community tokens also use the decentralized exchange. In the hive ecosystem, hive-engine was a very important constituent which fueled the growth of the whole token and front-end ecosystem.
Now the community is moving towards tribaldex, another dex for hive ecosystem. It is necessary to understand the concept of decentralized exchange.
Source: Bing
Decentralized Cryptocurrency Exchange allows the users to execute the peer-to-peer transaction. They do not require any third party involvement.
Centralized Exchanges has a lot of issues associated. Therefore, most of the users prefer decentralized exchanges. The decentralized exchanges don't facilitate the trading of Fiat Currencies for Cryptocurrencies. Decentralized cryptocurrency exchange supports crypto to crypto transactions. Decentralized means no central authority holds any funds or wallets. Users use their wallets to transact. When a user buys crypto using DEX, cryptos get directly generated into the user’s wallet.
Decentralized exchanges work only on a single blockchain. Hence, for trading in Hive tokens, tribaldex or hive-engine is mostly used. Now they are also trying to bring in more currencies but since the blockchains are different they are converting these currencies to swaps. These swaps are like I Owe You. Where the swap holder has the right to convert his swaps to underlying currency. Such as swap.matic holder can convert his swaps to matic currency and transfer the same to matic wallets outside the hive ecosystem.
Since on the liquidity pool, DEX works systematically. The users create the liquidity pool that provides the two currencies for illustration DEC:BEE or SWAP.HBD:BEE.
The liquidity pool is created so that the users deposit both the coins by entering into a smart contract. Hence, it would become very simple to exchange both coins.
I am hoping #vyb comes out with their liquidity pool. These liquidity pools also known as diesel pools are providing extraordinary APR of upto 200% on certain currencies.
These are some features involved in the Decentralised Exchange which makes the same attractive for the investors.
