Every cryptocurrency trader needs access to a crypto exchange, where they can sell, buy, and transact with crypto. These exchanges need to offer a highly balanced environment for an easy crypto transaction and smooth storage of crypto. Depending on the type of exchange, every platform will have its own set of rules and regulations and the traders are bound to follow them to conduct their businesses.
The crypto exchanges can thus be categorized as centralized or decentralized exchanges. When a cryptocurrency exchange development company begins to lay the foundation of its exchange, it uses the right coding to mold the exchange as a centralized or decentralized one. So, before engaging in providing crypto exchange development services, it is important to know each type in detail.
As the name suggests the centralized cryptocurrency exchange is known as a platform where you can buy or sell digital assets. On this platform, a third-party monitors the transaction and secures the assets on behalf of the buyer and the seller. There is no blockchain present during the interactions, and to interact you will have to submit your personal information for verification. The unique aspect of these platforms is that the more information you share with the platform, the higher will be your withdrawal quota. This type of exchange is very common with a cryptocurrency exchange developer and most companies and platforms offer their crypto exchange development services using this exchange.
A decentralized crypto currency exchange, also known as DEx is in most aspects similar to a centralized cryptocurrency exchange. The only thing that differentiates this exchange platform from the other is that it doesn’t have third party managing transactions. So, it is more of an open exchange platform that uses blockchain to store your funds and via which you can carry out all transactions, on which you rely. To be precise, the decentralized exchange platforms allow peer-to-peer (P2P) trading for which it uses assets, proxy tokens, or an escrow system. This is a big difference as a centralized cryptocurrency exchange works via the IOU-based system.
Further, let’s try to differentiate between the two platforms, and list down the merits and demerits of the crypto currency exchange for the developer’s ease of use.
So, counting the positives and negatives of these exchange platforms, a developer or exchange development company should decide on the structure they want to build for ease of every trader, and to attract more business.
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