A centralized exchange operates similar to the banks today:

  • There comes an owner.
  • They are safe.
  • They follow rules and regulations.

Although Centralized exchanges are in existence, the concept of Decentralized Exchangesis in circulation everywhere!

How does a Decentralized Exchange work?

A Decentralised exchange works as below:

  • A token owner places the order: In order to exchange his/her assets with another asset available on DEX. The token owner specifies the number of units, they have to sell, the cost of the token, and until which time bidding for their assets is allowed.
  • Once the selling order is set, other users can submit bids by signaling a buy order.
  • Once the time is set by seller expires, all the bids are reviewed and executed by both the parties.
While seeing from outside, as a user placing an order:
  • You are using your wallet address to sign in to blockchain decentralized exchange.
  • You can submit a buy or sell request.
  • The smart contracts get executed and transfer of assets is done.
  • Disconnect it.

With this popularity, a large number of startups are interested in knowing how to build a decentralized exchangeThe thing is it could possibly be the reason through which dividends can be raised.