Cryptocurrency exchanges in the decentralized finance system
Cryptocurrency exchanges in the decentralized finance system

Summary/Abstract: The purpose of this article is to explore the key aspects ofcryptocurrency exchange systems, including their role in storage,exchange, and token staking. By examining the characteristics andfeatures of these exchanges, cryptocurrency users can make informeddecisions about how to allocate and store their funds effectively.There are two main types of cryptocurrency exchanges: centralizedexchanges (CEX) and decentralized exchanges (DEX). Centralizedexchanges are governed by a central authority that manages user funds,providing a more streamlined and user-friendly experience. Howev-er, this centralization creates security risks, as users must trust theexchange with their assets. If the platform is compromised or experi-ences technical failures, users may suffer significant losses. Moreover,centralized exchanges often require identity verification and otherregulatory procedures, which can be a barrier for those who prioritizeprivacy or anonymity in their transactions. On the other hand, decen-tralized exchanges (DEXs) operate without a central governing body,allowing users to retain control over their funds and trade directly witheach other using smart contracts on a blockchain. This decentraliza-tion reduces reliance on intermediaries and enhances privacy, but italso presents challenges. DEXs tend to be more complex to use andmay require greater technical expertise.Future research should examine how various groups – ranging fromindividual investors to large financial institutions – are incorporatingcryptocurrency exchanges into their financial strategies

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