Decentralized Exchange (DEX)
A peer-to-peer exchange allowing users to trade cryptocurrency without the need for an intermediary.
What Is a Decentralized Exchange?
But there are several perceived disadvantages associated with traditional, centralized exchanges.
As a result, these private companies have oversight of those transactions, and collect and hold details on all its customers. This is a direct challenge to one of the cornerstones of cryptocurrency: that there should be the opportunity for anonymity if desired by a user.
DEXs are seen by many as a vital part of the next wave of development in crypto. However, truly decentralized offerings (for example Radar Relay, which is built on the 0x protocol) are still very much in their infancy, and trading volumes on these platforms tend to be low.
Additionally, DEXs are likely to face further challenges from regulators, who have signaled that they do not agree with the view that decentralized exchanges should not be subject to the same oversight as centralized rivals because they do not actually hold assets.