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Decentralized exchanges (DEX) leverage block-chain technology; instead of relying on a centralized entity, a network of computers is used to complete and verify transactions.
What are DEXes
Decentralized exchanges incorporate block-chain technology, and instead of relying on a centralized entity, a network of computers is used to complete transactions. Due to this system, DEXs can allow users to keep custody of their keys and crypto. On top of this, DEXs are genuinely peer to peer as smart contracts or relayers will directly match buyers and sellers.

Order Books (On and Off-Chain)
Traditional markets operate with order books, which match buyers and sellers depending on their reservation prices. This gets a bit tricky to do on a DEX as network nodes will need to record all transactions, meaning miners must verify every-single transaction. These systems run into front-running issues as all transactions must be verified, which takes time, especially on ETH. This means that people can view the transaction queue and jump ahead large orders, causing slippage to DEX users, while the “front-runner” profits.
Other DEX’s have adopted Off-Chain order books, which create quasi decentralized exchanges. Instead of the order-book being on-chain and verified by the various nodes, a centralized entity hosts the order book. Since these transactions are verified off-chain, it is not truly decentralized. To execute trades, orders are recorded on a separate server that is then communicated to the block-chain using relayers.
Examples include:
On-Chain: Bitshares, StellarTerm
Off-Chain: Binance DEX, 0x and EtherDelta
What is an Automated Market Maker

The more widely adopted DEX’s use Automated Market Maker technology, which has recently boomed due to the De-Fi wave. AMM’s ditch traditional order books for liquidity pools, which automatically execute trades following a smart contract. These DEX's allow users to make the market by depositing liquidity and are incentivizes users through transaction fees. Most AMM’s also offer additional incentives in governance tokens to ensure the platform has ample liquidity.
CEX vs. DEX
So, where is the appeal behind DEX’s vs. traditional CEX’s? DEX’s appeal to many users as traditional Centralized Exchanges (CEX) have many weaknesses concerning coin custody, identity breaches, server downtime, fees, and even insider trading. DEX’s address many of these problems, especially as they continue to develop and innovate, improving on these weaknesses further.
DEX’s offer users a secure, open, and permissionless way to swap their cryptocurrencies. Typically the new user experience begins with signing up for a Centralized Exchange and then undergoing Know Your Custom (KYC) polocies. On top of this, the users must “trust” the centralized entity as they have custody of their assets, as well as their information. As previously mentioned, this is not the case for DEX’s, which allow users to begin trading instantly as long as theyy have a wallet.
Weaknesses of DEX
Due to no centralized entities making the market DEX's can struggle to maintain ample liquidity for specific token pairs. Typically CEX’s have very deep liquidity allowing buyers and sellers to agree on prices easier through keeping the spread tight. Due to DEX's niche nature that relies on liquidity providers to create market depth, certain low demand token pairs may not be offered or may trade at premiums. DEX’s combat this through providing liquidity incentives, but the issue is still prevalent in specific scenarios.

While CEX’s may not be the best option, they are much more convenient for new users. Traditional order-books and CEX UI’s offer users an effortless and instantaneous trading experience. On the other hand, DEX’s on networks such as Ethereum will face 10-15 seconds transaction times, which offer basic UI/UX. On top of this CEX’s are much more forgiving allowing users to recover funds and accounts easier, whereas if a user loses their wallet code, their crypto is un-recoverable.
Looking Ahead with DEXes
Decentralization has been a growing focus in crypto markets. As the space continues to innovate, DEX, technology will follow. Overall there are multiple On-Chain, Off-Chain, and AMM DEX’s that all provide innovation to the space. As the DeFi space continues to expand rapidly, we can expect DEXs to experience an influx of volume.

Keep an eye on these exchanges as they capitalize on traditional exchanges’ weaknesses and continue to innovate as the space grows.
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This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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Related News

'Floktober' marks the beginning of the year's final quarter, and FLOKI's community may be expecting some significant announcements to emerge...
Unlocking the Exciting Potential of October for Floki
Certain moments stand out as pivotal junctures in the world of cryptocurrencies. For the Floki community, one such moment is the arrival of October, affectionately dubbed "Floktober." It is a name born from the collective enthusiasm of Floki's community.
This is the start of the year's final quarter, and some significant Floki-themed announcements may be on the horizon.
A Glimpse into Floki's Roadmap
Behind this excitement lies a compelling reason: many major milestones on Floki's roadmap are nearing fruition.
#FLOKI 2023 ROADMAP UPDATE
— FLOKI (@RealFlokiInu) June 22, 2023
We are VERY CLOSE to delivering on several key promises on the $FLOKI 2023 roadmap, so we believe an update is long overdue to show where we are at.
Here is a quick overview of some of the exciting things our devs are working on behind the scenes that… pic.twitter.com/EjGj284jCk
These impending developments encompass a spectrum of significant initiatives, including staking, a noteworthy upgrade for the FlokiFi Locker, introducing a mysterious protocol named Project TL, and the eagerly awaited mainnet launch of Valhalla, Floki's groundbreaking metaverse game.
FLOKTOBER! ⏳⏰🔥
— B (Da Viking) (@100bviking) September 22, 2023
"B," a prominent member of Floki's core team, has provided insights into the heightened anticipation within the community.
“October has historically been a good month for crypto. Even more so for Floki! So much so that our community has named the month of October "Floktober". This is generally used to refer to the good vibes and positive news that tend to come in for Floki in the month of October,” 'B', a core team member at Floki, told BSC News. “I don't think this October will be different. Our team has been working extra hard for a long time now, and I believe starting in October and leading to the end of the year, we can finally start showing what we've been working on!”
Lets delve into the updates that may soon emerge:
FlokiFi Locker: A Key Upgrade on the Horizon
FlokiFi Locker, the digital asset locker protocol introduced by the Floki team, is set to undergo a significant upgrade. This versatile platform allows users to securely lock various assets, including Liquidity Pool (LP) tokens, fungible tokens, NFTs, and multi tokens, reducing the the risk of a rug.
Currently, FlokiFi boasts an impressive $8.77 million worth of assets locked, accompanied by 72 NFTs. Prominent projects like ApeSwap, Biswap, and Chainlink have already chosen to collaborate with Floki for FlokiFi Locker. The community might anticipate a crucial upgrade announcement in the fourth quarter of this year.
Project TL: A Mystery Waiting to Unfold
Another development ostensibly on the horizon is the unveiling of Project TL. At this point, the details surrounding Project TL remain hidden in mystery, leaving the community in eager anticipation. Followers hope for more information to emerge as the days unfold, shedding light on this unknown project's purpose and potential impact.
Valhalla Metaverse Game Release: A Gaming Revolution
In gaming, Floki's Valhalla metaverse game is generating considerable excitement. Set to be released in Q4 2023, Valhalla represents a play-to-earn NFT gaming metaverse, combining blockchain technology and immersive gaming experiences.
Valhalla rewards players not only with $FLOKI for their in-game battles but also with complete ownership of in-game assets, which they can freely trade on platforms like FlokiPlaces. This metaverse game, powered by the FLOKI token, reportedly incorporates A-level game mechanics on the blockchain. This includes on-chain gaming interactions and upgradeable NFTs.
As Floktober approaches, the Floki community eagerly awaits these upcoming events, each carrying the potential to shape the future of Floki.
Floktober's Potential
Floki has sought to turn "Floktober" into a beacon of innovation and anticipation each year. Over recent times, the organization has utilized October as a canvas for its marketing endeavors, calling it "Floktober."
One of the boldest strokes in Floki's marketing palette was witnessed in October 2021. The cryptocurrency embarked on an audacious journey, commandeering 300 iconic London red city buses and adorning The Tube Underground with its branding for the entire month.
With this, Floki harbors a vision of broader mainstream exposure, with the ultimate goal of being embraced by a more extensive and diverse user base.
A Macro Support Zone: Insights from Crypto Tony
Crypto analyst Crypto Tony provides valuable perspective on Floki's current positioning. With an observation that "FLOKI is sat on a macro support zone," there is a sense of stability and resilience underpinning the cryptocurrency.
$FLOKI / @RealFlokiInu - Update #Flokitober is around the corner, and with $DOGE looking hot for a pump, well i expect some magic from the leaders
— Crypto Tony (@CryptoTony__) September 27, 2023
Also note that #FLOKI is sat on a macro support zone. Accumulation time legends pic.twitter.com/XVNrkXoIo1
As we venture deeper into Floktober, the Floki community remains poised for what promises to be an exciting chapter in the cryptocurrency's narrative.
Floki's ability to transform October into a month of celebration, innovation, and strategic advancement is characteristic of its so far dynamic approach to the world of cryptocurrency. With each passing Floktober, the Floki community and its supporters eagerly anticipate the revelations and developments that will shape the Floki ecosystem.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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