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Decentralized exchanges (DEXes) can genuinely be called trustless, as this is the best way to characterize their main distinction from the centralized currency and trading exchanges. To trade on a DEX, you don’t need to “trust” the exchange to perform transactions. DEXes work “without trust” – you may not know who is behind them, since DEXes work automatically. They are, in essence, a smart contract. A smart contract cannot fail to follow the instructions given to it – this is the definition of a system that functions without trust between the two parties. Centralized exchanges (CEXes) generate orderbooks (price quotes for purchases and sa

Here we will talk in more details about the AMM DEX protocol, which automatically calculates the cost of your assets and turns the decentralized exchange into a convenient currency exchange office. Simply put, an AMM (automated market maker) is a robot that quotes a price for an asset. This is the price for which you can buy or sell this particular asset. This robot also gives you access to the liquidity pools and, consequently, to the cryptoassets available to exchange. On the centralized exchanges (CEX), the price of the asset is determined by the sellers and buyers: the sellers set a price for the sale of their assets, and the buyers

If you have a cryptocurrency wallet, you were most likely instructed to keep a phrase of 12 or 24 randomly-chosen words in a safe place. This very combination of words is a seed phrase. This phrase, as well as your private key, allows you full access to your wallet (although the seed phrase is not the same as the private key). You need the private key to confirm (or, so to say, ‘sign’) your transactions, but often you don’t even know what it is – the crypto wallet signs your transactions for you with your private key. As for the seed phrase, you can see it when you generate your wallet, and this is when you are supposed to note it and kee

We will examine two types of decentralized exchanges: Orderbook DEXs AMM DEX Orderbook DEXs resemble centralized exchanges (CEX) in their interface and operational principles. Trading participants place their orders to buy or sell their cryptoassets on the exchange, and a deal is reached when the stated prices match. The transaction takes place only when there is a counter order for a transaction from another user. Unlike on a CEX, where the exchange itself serves as the third party and is responsible for processing a transaction, the smart contract, i.e. self-executing software, takes care of this. AMM DEXs (automated market

A smart contract is computer code with a set of rules that are executed when certain conditions occur. This happens automatically, without human involvement and without trust between the two participants of the transaction. But what happens if a developer accidentally or intentionally makes a mistake in a smart contract? Participants lose their money. At the same time, typical critical errors in smart contracts are usually detected by automatic analyzers. But when we want to check the high-level logic of smart contracts and the compliance of the rules with the stated goals, this requires a rather complex audit involving specialists who

This post describes the key differences between the decentralized and centralized exchanges (DEXs and CEXs) briefly and in little detail. A few examples of CEXs are Binance, FTX, Coinbase, and Kraken. A few examples of DEXs are Uniswap, dYdX, and PancakeSwap. For the full lists, see coinmarketcap.com: DEXs, CEXs. DEXs versus CEXs: • Faster to operate as there is no need to register and no need to replenish the deposit beforehand. • As a rule, total fees are lower, since you don’t need to replenish the deposit and then withdraw funds from it to put them in the wallet. • Since there is no intermediary organization, there is no on