Centralized vs. decentralized cryptocurrency exchanges
Centralized cryptocurrency exchanges act as a third party between the customer and the supplier. Because they can be managed and controlled through an organization, central exchanges provide additional security. A centralized exchange takes place for approximately 99% of all cryptographic transactions.
Decentralized cryptocurrency exchanges (DEX) allow users to perform peer-to-peer transactions without the need for third parties or intermediaries. However, due to problems with centralized exchanges, decentralized exchanges are preferred due to the use of certain customers.
However, decentralized trading does not make it easy to buy and sell fiat currencies for cryptocurrencies.
Since the creation of decentralized exchanges (DEX) a few years ago, there has been a significant change from conventional centralized exchanges (CEX). Consequently, there is debate as to which replacement model can stand the test of time.
While both topics are very important due to various factors on both sides, DEX, on the other hand, continues to attract huge investments, even if it has only been around for half a century.
There are currently at least 35 active DEX platforms based on blockchain diversity, and the market continues to grow with no signs of slowing down. Yahoo Finance also announced that DEX’s trading volume had reached over $140 billion. And this number is constantly growing.
Currently, there is considerable controversy over the long-term viability of DEX, and some industry experts believe that DEX and CEX must coexist to be sustainable.
A blockchain solution with thinking has emerged with a solution that allows the CEX and DEX exchanges to remain seamless instead of wasting time waiting to see who won the long-term bid.
123swap, a decentralized cross-chain network, wants to narrow the gap between DEX and CEX and allows interoperability between smart contracts in different blockchains.
In an exclusive interview with DailyCoin, 123swap CEO Tomas Ambrazas talks about the current state of cryptocurrency trading and how the two-year-old startup is trying to revolutionize the entire trading experience with personalized solutions.
123swap grew out of many factors, including one of the challenges and non-scalable factors associated with centralized exchanges. Ambrazas addressed some of CEX’s biggest challenges that have facilitated DEX’s rapid expansion.
According to him, the number of active blockchain systems has grown over the years, which also means an even greater increase in the number of crypto tokens operating on their blockchain.
Ambrazas also said that it is very difficult for CEX companies to process most of these signals, especially when engaging in business activities such as exchanges and cultivation.
Ambrazas said the current business reality is that each blockchain wants its own custom tokens hosted on its own network.
For example, Ambrazas found that around 90 to 95% of most utility tokens are hosted on the blockchain. Fast forward, and things will be a little different.
“In contrast to a few years ago, we now have more alternative blockchains such as Binance Chain, Harmony Chain, and Polkadot. The consequence of this is that a good blockchain token, designed primarily for interoperability, can be hosted across multiple tasks, can still be 5, 10, or more,” said Ambrazas.
123swap will bridge the gap between DEX and CEX; after 123swap highlighted some of the failures in CEX and offered expert advice on the coexistence of CEX-DEX, 123swap created a solution that eliminates the differences between the two exchanges.
For example, the platform bridges the gap between an integrated CEX platform and then connects to DEX platforms so that both worlds can benefit from each other.
“Our solution is to complete the changes to the Binance smart chain and the Ethereum chain for swap, farming, yield product, and their governments. Therefore, you can use the two most popular chains for all swapping and farming purposes. Similarly, you can add and remove liquidity, as well as check all of our systems to see how it works. It is alive and fully operational “, said Ambrazas.