'In This Market, Crypto Buyers Can’t Risk Centralized Exchanges' cc: Alexlikescrypto max_aptilon DexilonExchange defi cryptocurrencyderivatives
Crypto is down. Badly. Bitcoin is at its lowest value in 18 months and fellow coins aren’t fairing much better. The downturn is cause for concern – and not just because of asset devaluation. Rather, investors should reconsider exactly where they are trading their crypto and how they are storing it.
Investors should exercise caution and turn to what made blockchain so great in the first place: decentralization. Let’s explore.First, let’s take a step back and consider the current state of CEXs. Unlike the world of centralized finance – like banks, hedge funds and corporations – there are few rules of the game when it comes to crypto trading.
It’s for this reason that critics describe CEXs as “black boxes” – the truth of what’s going on behind closed doors is anyone’s guess. It’s also for this reason that crypto buyers should exercise due diligence when trading or storing assets on these platforms. As mentioned above, CEXs could claim your coins in the event of bankruptcy. Likewise, because it’s hard to say what’s going on inside of the black box, bad actors can abuse their power and manipulate the market.
Consider a peer-to-peer decentralized orderbook-based DEX. Unlike many of the current DEXs solutions which rely on AMM and P2C , P2P trading built on top of the blockchain solves two critical problems. Firstly, transparent and verifiable trading rules. Secondly, much better asset pricing and lower slippage as market forces of supply and demand between users determine the equilibrium price of the asset.The message is clear for crypto traders in this moment of madness: be careful.
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