Decentralized exchanges started to gain popularity in 2017 and 2018 because they provide distinct advantages over centralized exchanges. Most notably, decentralized exchanges are considered much safer than their centralized counterparts as funds are always kept by the user and are not held on a centralized exchange server.
In this guide, you will learn what a decentralized exchange (DEX) is and you will discover the best decentralized exchanges on three of the popular blockchain networks; Ethereum, EOS, and Tron.
What Is a Decentralized Exchange (DEX)?
A decentralized exchange, commonly referred to as a DEX, is a digital asset exchange that operates without a centralized authority. On a DEX, users trade directly with one another on a peer-to-peer basis on the blockchain.
Generally, decentralized exchanges leverage smart contracts to enable peer-to-peer trading directly on the blockchain so that users can hold their own funds as opposed to having to deposit them on an exchange account. Additionally, trading on decentralized exchanges can be conducted with complete privacy as there are usually no signup or KYC requirements. Finally, trading on a DEX usually incurs lower trading fees than on their centralized counterparts as blockchain transaction fees are usually the only costs incurred.
The main drawback of decentralized exchanges is that they require a certain degree of technical know-how and an understanding of how smart contracts work. Hence, they are not ideal for new digital asset investors.
Best Decentralized Exchanges
We have compiled a list of the most popular decentralized exchanges on Ethereum, EOS, and Tron that you can use to trade digital tokens in 2019.
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