Centralized crypto exchanges (CEX) such as Binance and Kraken are gradually losing their former popularity. According to spring 2023 statistics, crypto-enthusiasts are actively migrating to decentralized exchanges (DEX) as conventional exchanges have become the epicenter of scandals and regulatory attacks.
In this reviews we will learn how CEX differs from DEX, as well as explore the possibilities of an innovative decentralized exchange CrowdSwap, with which it will be as easy as possible for a beginner to start his immersion in the world of DEX.
The beginning of decentralized exchanges
If a year ago, a decentralized exchange seemed exotic to most, then in June 2023, the popularity of this type of exchange increased dramatically - on 444% compared to last month.
For example, the trading volume of Uniswap in February 2023 exceeded the trading volume of the second largest exchange in the world, Coinbase. The trading volume of Uniswap, a decentralized exchange running on the Ethereum blockchain, in April was $ 37 billion while Coinbase trading volume is $ 34 billion
Even a year ago, such numbers seemed unbelievable. What has changed in the market? The bankruptcy of FTX at the end of 2022 shook the market and showed how dangerous it is to keep money even on large centralized exchanges. US regulatory pressure on Binance and Coinbase in 2023 showed how vulnerable CEX exchanges are, they could fall victim to government blocks at any moment.
Increasing regulatory pressure has made KYC more complicated, depriving users of anonymity and requiring vast amounts of personal information. After blocking the account, the owner needs to provide three documents, two certificates and a bunch of selfies in different combinations to regain access to the CEX exchange, not counting the nerves and time spent on correspondence.
Faced with such unpleasant surprises more and more often, users migrate to an alternative - decentralized exchanges - DEXs, which preach much freer trading rules.
What makes DEX different?
Typically, CEX, a centralized crypto exchange, has a central server where all transactions are processed. It is monitored and maintained by exchange employees who act as arbitrators and can independently decide whether to approve your transaction or allow access or withdrawal. In the work of DEX, on the contrary, a person does not participate in the trading process - everything is done thanks to the algorithmic matching of transactions based on smart contracts.
Typically, DEX does not require registration to get started. Such exchanges enable direct trading between two wallets without the intervention of a third party. This is the main difference from CEX – on a decentralized exchange, all control over the account and money remains with the user. Basically, DEX does not store crypto assets, they continue to be stored in your wallet even during the process of working with the exchange. Therefore, neither the exchange nor the regulator will be able to freeze your funds or somehow cancel the transaction retroactively.
However, this also has a reverse side - the complexity of such autonomous platforms increases, which leads to increased responsibility of the DEX user for his actions. The good news is that recently a new generation of DEX-exchanges is starting to appear, which are friendly and understandable for ordinary users.
CrowdSwap as a new generation DEX
Having received his share of negative experience in working with CEX, the author of the article finally decided to migrate to DEX. After sifting through the many options available, I chose DEX CrowdSwap.
Security
It is important to understand that due to the presence of vulnerabilities in the code of smart contracts, some DEXs are subject to hacker attacks. Such incidents usually do not threaten users' funds, but can lead to the loss of liquidity providers' funds. We often hear similar unpleasant stories from the news about another DeFi service hack. Therefore, this point is in the first place.
And here CrowdSwap makes a pleasant impression - all the information about successful audits, on which both time and money are spent, is available in the open access. Unfortunately, not every DEX can boast of successfully passed security audits.
No more barriers
One of the original functions CrowdSwap - the possibility of cross-chain exchange. This means you can exchange any token/coin from any supported blockchain. For example, you can exchange BNB for Ethereum or Ethereum for Matic. Other DEXs are "complicated" in this regard - they offer ETH (ERC-20) to ETH (BEP-20) exchange or stablecoin bridges.
On the CrowdSwap this transparent sharing feature is integrated into all services. For example, you can invest in farming with tokens from any blockchain, the same is true for staking.
CrowdSwap uses its own technology for this Cross-chain Liquidity Protocol (CCLP), which simplifies the life of an ordinary user, because it erases the barriers between different blockchains.
Speed and economy
This is another important aspect that can confuse users of traditional exchanges. On DEX, all transactions are done directly on-chain in the blockchain, so transactions can be slow and expensive, especially when the network is congested. When you first come to CEX, this difference is immediately noticeable.
And here CrowdSwap uses a very interesting technology - Best Price Routing (BPR), which allows you to choose the most profitable options for routing your transaction. This is how the exchange describes the essence of the technology:
“We analyze the smart contract and use blockchain data intensively to ensure the best routing. We found that routing paths are usually chosen based on the health of the liquidity pool rather than the best value for the user. At CrowdSwap, the priority is always price."
“Let's say you want to exchange your 10 ETH for CRV tokens. As you can see from the above screenshot, you will pay $84,32 in fees if you exchange via CrowdSwap routing. If you used a standard DEX like Uniswap v3, you would pay $298,89 in fees. Using CrowdSwap will save you $214,57 in fees.”
As you can see, BPR really saves you money, and this feature favorably distinguishes this exchange from other DEXs.
In terms of savings, you can also mention the Search function, which allows you to easily find the most profitable options for buying assets of interest:
“The search finds the best prices for a pair of tokens in the DeFi space, along with all the associated costs. Network boundaries are no longer a barrier to sharing. If the price is better on another network, CrowdSwap will easily guide you through cross-chain exchanges.”
Innovation does not end there. For similar exchanges in CrowdSwap proprietary technology is used Cross-Chain Liquidity Protocol (CCLP), which erases the barriers between different blockchains.
The next important feature that others do not have is Fast Lane Transaction (FLT). Simply put, it is a technology that allows you to package a series of your transactions that are inevitable on other DEXs into one cumulative transaction. Why pay for many transactions when you can pay for just one? This is how the exchange itself describes this opportunity:
"Automation is at the heart of FLT, and eliminates the need for numerous manual operations, which ensures higher safety and speed. Figuratively speaking, get on a high-speed train and do not allow yourself to stop at unnecessary stations.
Even taking into account the above - and this is only a part of what CrowdSwap has - it can be stated that the exchange quite rightly calls itself revolutionary. This DEX is better than standard DEXs, which are often complex, expensive and slow. I'll be honest, after getting used to the CrowdSwap functionality, I don't want to go back to Uniswap at all.
Portfolio manager
In addition to technical innovations, I would like to describe another unusual one tool stock exchange Many crypt enthusiasts use various third-party applications of the class crypto portfolio tracker. These programs are used to record the available crypto, as well as to track the financial dynamics of the coins of interest.
But CrowdSwap decided to go further in this matter and added here also advanced analytics from the world of DeFi/Web3. Today, it is easy to get lost in specific exchange terminology, for example, in the coefficients of return on swaps, in the values \uXNUMXb\uXNUMXbof APY rates or TVL volumes, etc. It free web solution will help you independently understand the metrics of your assets by adding specific calculators.
This is how the authors themselves describe this service:
"PORTFOLIO MANAGER is a tool for managing a basket of assets and maximizing its profitability by analyzing the profitability of each asset. This function allows you to ensure the preservation of the value of your funds. You can make more profit by timely reacting to cryptocurrency changes and balancing your basket.”
This is a nice addition to the exchange that will further tie CrowdSwap together.
The exchange is friendly to you
Finally, it is difficult not to mention the excellent support service at this DEX. Many who migrate from CEX experience temporary adjustment problems because the world of decentralized finance is set up differently. Most often, it becomes an insurmountable psychological barrier to transition. And here the help that will allow you to take the first confident steps in the world of DEX is very important.
In addition to the usual ticket system for exchanges, CrowdSwap support is also available directly on Discord, where you can get the usual live chat and quick answers to questions. Such an informal decision is a conscious step towards its audience on the part of CrowdSwap, which is trying to make your life within this DEX as comfortable as possible.
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