Intro to DEX - Pros & Cons
1. PRO – Privacy and Anonymity
Using a DEX typically only requires you to connect your wallet and sign a transaction with no other identify verification process necessary.
2. PRO – Security
DEXs are generally more secure than CEXs for two reasons: non-Custodial which, unlike CEXs, the DEX does not hold your Private Key – YOU are responsible for the safety of your Private Key. No identity checks so there is no risk of leaking your private information.
3. PRO – DeFi and NFT Integration
DeFi and NFTs are the two frontiers of the blockchain space and the DEXs are strong propellers. DEX allows users to access the world of smart contracts and DApps that provide financial services, including lending and savings products, as well as NFT products.
4. CON – Limited Trading
DEXs are currently limited in functionality. Features like margin trades, limit orders, options, futures, etc. are typically unavailable.
5. CON – Efficiency
DEXs are not as fast and efficient as CEXs due to the scalability issues most blockchains are faced with. CEXs do not incur this problem because they use both on-chain and off-chain mechanisms to run smoothly.