{"id":448739,"date":"2022-05-17T20:00:13","date_gmt":"2022-05-17T17:00:13","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/what-is-a-dex-decentralized-exchanges-explained\/"},"modified":"2022-05-17T20:00:13","modified_gmt":"2022-05-17T17:00:13","slug":"what-is-a-dex-decentralized-exchanges-explained","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/","title":{"rendered":"#What Is a DEX? Decentralized Exchanges Explained"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a28ce326dd40\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a28ce326dd40\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/#%E2%80%9CWhat_Is_a_DEX_Decentralized_Exchanges_Explained%E2%80%9D\" >&#8220;What Is a DEX? Decentralized Exchanges Explained&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/#DEX_vs_Centralized_Exchange\" >DEX vs. Centralized Exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/#DEXs_Use_Liquidity_Pools\" >DEXs Use Liquidity Pools<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/#DEX_Details\" >DEX Details<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/what-is-a-dex-decentralized-exchanges-explained\/#Final_Word_of_Caution\" >Final Word of Caution<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CWhat_Is_a_DEX_Decentralized_Exchanges_Explained%E2%80%9D\"><\/span>&#8220;What Is a DEX? Decentralized Exchanges Explained&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>\n<figure style=\"width: 1200px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"type:primaryImage wp-image-800435 size-full\" data-pagespeed-lazy-srcset=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/04\/shutterstock_1120602608.png?width=398&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 400w, https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/04\/shutterstock_1120602608.png?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1 1200w\" sizes=\"auto, 400w, 1200w\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/04\/shutterstock_1120602608.png?width=1198&amp;trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"A currency exchange with cryptocurrency tokens.\" width=\"1200\" height=\"675\" data-crediturl=\"https:\/\/www.shutterstock.com\/image-photo\/modern-way-exchange-bitcoin-convenient-payment-1120602608\" data-credittext=\"Phongphan\/Shutterstock.com\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><figcaption class=\"wp-caption-text\"><span class=\"type:primaryImage imagecredit\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shutterstock.com\/image-photo\/modern-way-exchange-bitcoin-convenient-payment-1120602608\">Phongphan\/Shutterstock.com<\/a><\/span><\/figcaption><\/figure>\n<p>A decentralized exchange (DEX) has distinct advantages over centralized exchanges. However, before using a DEX for all of your cryptocurrency transactions, you should be aware of the limitations.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"DEX_vs_Centralized_Exchange\"><\/span>DEX vs. Centralized Exchange<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A DEX is commonly used to purchase tokens, not coins. These tokens can only be purchased with native currencies of blockchains, like Ethereum. Centralized exchanges, like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fwww.coinbase.com%2F\">Coinbase<\/a> or <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/redirect.viglink.com\/?key=204a528a336ede4177fff0d84a044482&amp;u=https%3A%2F%2Fwww.gemini.com%2F\">Gemini<\/a>, are usually used to purchase cryptocurrencies with cash. Only some of the most popular tokens may be listed on centralized exchanges. If traders want to buy and sell lesser-known tokens, a DEX is the way to go.<\/p>\n<p>Unlike centralized exchanges, decentralized exchanges do not require users to submit identifying documentation. A <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> benefit of cryptocurrency use is the basis of anonymity. DEXs do not require identification. Users can operate completely anonymously.<\/p>\n<p>Centralized exchanges can also charge high fees since they operate as a business to earn profit. In comparison, DEXs typically charge much lower fees.<\/p>\n<p>Be aware:\u00a0Since DEXs are not operated by a company, there is no customer support. Ensure that you are familiar with how to use a DEX before starting to trade. They can require a little more know-how than centralized exchanges. If you do something wrong or make a mistake, there is no person there to help.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"DEXs_Use_Liquidity_Pools\"><\/span>DEXs Use Liquidity Pools<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Typical exchanges require that there is a buyer for every seller. Unfortunately, that is not always the case depending on the desired price. To combat this inefficiency, DEXs use liquidity pools so that sellers always have a buyer and vice versa. Despite operating behind the scenes, all transactions are technically made with the liquidity pool. The liquidity pool could be compared to currency exchanges typically found in airports. One currency is deposited in exchange for another. Instead of relying on humans, liquidity pools use smart contracts to ensure there are sufficient funds and prices are set accurately.<\/p>\n<p><strong>RELATED:<\/strong> <strong><em>What is Ethereum, and What Are Smart Contracts?<\/em><\/strong><\/p>\n<p>An example should help. If purchasing <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/chain.link\/\">Chainlink<\/a> (LINK), a user will exchange Ethereum (ETH) for LINK through an ETH\/LINK liquidity pool. In this pool, there is a reserve of ETH and a reserve of LINK. Once the user has deposited ETH, they will then receive LINK. Smart contracts that run the liquidity pool then ensure the transaction is accurate and the reserve amounts of each currency are updated.<\/p>\n<p>Despite seeming complex, most of this is done without the user even knowing. Users can exchange Ethereum or other coins like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.binance.us\/en\/home\">Binance\u2019s<\/a> BNB, for a plethora of tokens with just a few clicks.<\/p>\n<figure style=\"width: 650px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-800436 size-full\" data-pagespeed-lazy-src=\"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/04\/shutterstock_1966756618.png?trim=1,1&amp;bg-color=000&amp;pad=1,1\" alt=\"Uniswap and PancakeSwap coins.\" width=\"650\" height=\"390\" data-crediturl=\"https:\/\/www.shutterstock.com\/image-vector\/uniswap-pancakeswap-coin-crypto-market-1966756618\" data-credittext=\"INDEEDLYxZilverlight\/Shutterstock.com\" src=\"\/pagespeed_static\/1.JiBnMqyl6S.gif\" onload=\"pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\" onerror=\"this.onerror=null;pagespeed.lazyLoadImages.loadIfVisibleAndMaybeBeacon(this);\"\/><figcaption class=\"wp-caption-text\"><span class=\"imagecredit\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.shutterstock.com\/image-vector\/uniswap-pancakeswap-coin-crypto-market-1966756618\">INDEEDLYxZilverlight\/Shutterstock.com<\/a><\/span><\/figcaption><\/figure>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"DEX_Details\"><\/span>DEX Details<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Typically, DEXs only interact with the blockchain it is built on. Tokens that use the same blockchain as the DEX can be traded. So a DEX built on the Ethereum blockchain can only trade Ethereum based tokens. If a DEX is built on the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.bnbchain.world\/en\/smartChain\">Binance Smart Chain<\/a> then it can only trade tokens using BNB.<\/p>\n<p>Ethereum is the most popular blockchain for tokens due to its unique programmable smart contracts. As a result of this popularity, the Ethereum-based DEX, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/uniswap.org\/\">Uniswap<\/a>, has become favored by token traders.<\/p>\n<p>Another popular DEX is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/pancakeswap.finance\/\">PancakeSwap<\/a>. Unlike Uniswap, PancakeSwap is built on the Binance Smart Chain. Some prefer DEXs based on Binance Smart Chain due to the lower fees.<\/p>\n<p>A wallet like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/metamask.io\/\">Metamask<\/a> directly integrates with Uniswap or PancakeSwap. Once connected to the DEX, users can \u201cswap\u201d out Ethereum or BNB for thousands of different tokens.<\/p>\n<p>There are ways to trade tokens built on different blockchains but it can be a little more complicated for users. These are known as aggregate DEXs. If interested in an aggregate DEX, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/app.1inch.io\/#\/1\/swap\/ETH\/DAI\">1Inch<\/a> is widely used to find users the best deals on their token transactions.<\/p>\n<h2 role=\"heading\" aria-level=\"2\"><span class=\"ez-toc-section\" id=\"Final_Word_of_Caution\"><\/span>Final Word of Caution<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When attempting to use a DEX for the first time try using small amounts first to increase confidence and minimize potential mistakes. Most importantly, use available resources on the internet to fully understand how to operate with a DEX. DEXs can be extremely useful for buying and selling your favorite tokens. They have numerous advantages over centralized exchanges but there are some technicalities that can make it difficult for first time users.<\/p>\n<\/div>\n<p><script>\n setTimeout(function(){\n  !function(f,b,e,v,n,t,s)\n  {if(f.fbq)return;n=f.fbq=function(){n.callMethod?\n  n.callMethod.apply(n,arguments):n.queue.push(arguments)};\n  if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\n  n.queue=[];t=b.createElement(e);t.async=!0;\n  t.src=v;s=b.getElementsByTagName(e)[0];\n  s.parentNode.insertBefore(t,s) } (window, document,'script',\n  'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\n   fbq('init', '335401813750447');\n   fbq('track', 'PageView');\n  },3000);\n<\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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Decentralized Exchanges Explained&#8221; Phongphan\/Shutterstock.com A decentralized exchange (DEX) has distinct advantages over centralized exchanges. However, before using a DEX for all of your cryptocurrency transactions, you should be aware of the limitations. DEX vs. Centralized Exchange A DEX is commonly used to purchase tokens, not coins. These tokens can only be&#8230;<\/p>\n","protected":false},"author":1,"featured_media":448740,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/www.howtogeek.com\/wp-content\/uploads\/2022\/04\/shutterstock_1120602608.png?height=200p&trim=2,2,2,2","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-448739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/448739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=448739"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/448739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/448740"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=448739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=448739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=448739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}