CEX v DEX v S-DEX
Note: graphs in this section show only a) transactions and b) wallets involved.
Last updated
Note: graphs in this section show only a) transactions and b) wallets involved.
Last updated
Centralized Exchanges are the most important "black box" of the crypto ecosystem, and dwarf their decentralized counterparts in trading volume by several magnitudes due to superior scalability, and in spite of a lack of transparency or a common framework of rules.
The many entities that fall within the definition of a CEX vary greatly among one another, for example Binance uses a single massive hot wallet to process all deposits & withdrawals, while some may use different arrangements.
Thanks to IntoTheBlock for the data visualization used as reference above
Bigger volumes / liquidity
Cheaper fees
Maintainable / upgradeable
Scalability
Corporate monsters squeezing you for every cent you're worth
Hacks and other security risks
Operating from tax havens
Wash trading, and abundant varieties of other *dubious* (read: borderline criminal) practices
Many in DeFi look somewhat like this, although there are many variations sprouting. They trade cost efficiency (slippage, large arbitrage gaps) for censorship resistance.
Censorship resistant
Trust-less
Slippage fees
High arbitrage opportunities in small pools
Bad and/or malicious listings (e.g. deploying fake tokens with same name as legitimate project to trick people into buying yours on the wave of their demand)
Scalability is limited to liquidity directly available
Only ERC20 (usually) utility tokens
Bigger volumes / liquidity networks
Non-Profit - distributes revenue generated as activity incentives & performance rewards
Trust-less
Maintainable / upgradeable
Multichain interoperability
Trade ALL assets of value, however you want
Limitless Scalability
Positive Global Economic effects + creates opportunities
Long time to market - Requires auditing / bureaucracy / intensive testing
Expensive and difficult to launch
