Hello lovely people of Hive community. Hopefully you will be enjoying your life with good health and spirit. Friends, year 2021 proved great for crypto and there are number of coins which achieved all time high worth. Poor economic condition, soaring interest rate and increasing inflation numbers have restricted the global crypto market cap to less than $1 Trillion which at one stage was about to touch $3 Trillion.
Crypto market observed more popularity despite long crypto winter. As a result new centralized exchanges and decentralized exchanges are growing rapidly. Traders love to earn profit while trading. Two type of exchanges are used in crypto for trading.
Centralized Exchange
Decentralized Exchange.
Centralized Exchange is good for investors who like high trading volume, high liquidity and user friendly interface. Centralized exchanges are easy to use and it involved standard fee for trading. Beside this, centralized exchange provides you fiat payment option for trading. Another advantage of using centralized exchange is that it provide an option to use various features like margin trading, bots trading etc. Example of centralized exchanges are Binance, coinbase, kucoin etc.
Centralized exchanges have many benefits. However, there are few cons in using centralized exchanges. Centralized exchanges can block you asset any time. You don't have access of assets despite owning them. Server of centralized exchange may be down at any time. There is more probability of hacking and cybersecurity risk in centralized exchanges.
On the other hand, decentralized exchange provide liberty to owners to exchange their assets any time. You have full control over your assets. Decentralized exchange doesn't require to transfer your asset to third party. Example of decentralized exchange includes cubdefi, pancakeswap, uniswap etc.,
Both centralized and decentralized exchanges have pros and cons. One of the real cons of decentralized exchanges is low trading volume, low liquidity problem which make your trading experience slow down and it may take lot of time to fill big order.
Decentralized exchanges are more safe as your holding remain in your wallet. However low trading volume and low liquidity is a big hurdle in creating the popularity of decentralized exchange. Decentralized exchange with high volume will definitely attract more user.
What do you think which exchange is a better option, centralized or decentralized exchange?
This is it for my today post. Wish you all a very happy, healthy and prosperous life ahead. Have a nice time.