Hackernoon logoDeFi Decentralized Exchanges: An Overview by@alfredodecandia

DeFi Decentralized Exchanges: An Overview

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@alfredodecandiaAlfredo de Candia

Author of "Mastering EOS" & "Mastering DeFi" blockchain specialist, android developer

We continue our journey in the areas of decentralized finance (DeFi) and today we talk about the sector with the greatest weight of all DeFi up to now, especially dollars locked in the various platforms and blockchains, i.e. decentralized exchanges (DEX).

An important aspect of this sector are also decentralized exchanges or DEX, which allow to exchange tokens, namely swap, with other assets and all without requiring some form of authorization.

In fact, in the world of blockchain, exchanges have evolved over time, i.e. platforms that allow the supply and demand of digital assets to meet, first of all Bitcoin (BTC) and subsequently also to other assets.

If in the past, due to their little use and value, exchanges did not have real legislation and self-regulation, today the situation has changed a lot and almost all of them impose procedures for user recognition, procedures that take the name of KYC (Know Your Customer) and AML (Anti Money Laundering).

This is certainly an obstacle for all those who do not want to give their personal data, partly out of fear and partly to remain private, because by providing this data an address is associated with a name, and there is no privacy coin that holds, because all the starting data are known.

Another negative aspect of traditional exchanges or CEX (centralized exchanges) is the panorama of assets they offer, subject to their will and costs, let's not forget that exchanges often impose costs for the listing of new tokens, a cost that the team of the project and in addition it must also have minimum volumes, i.e. exchanges, in order to continue to be able to remain on the same, since if no one exchanges or requests that token then it means that there is not the slightest interest from the user.

So we can see that it is very difficult for a small project to hope to land on a prestigious platform.

Finally, another negative aspect of using a CEX is that of not having the private keys of our wallets, since we are using only a graphical interface but in fact the cryptocurrencies are available to the exchange which can dispose of them as it wishes, not to mention of the fact that it can freeze funds and prevent the user from using them at will.

With all these problems we can understand how DEX have had an easy life and have spread without problems because they actually allow anyone to exchange any token but also to list it, providing its liquidity, thus also defining its value, in this case. let's talk about liquidity pools.The advantage of DEXs is to have an open platform, with different assets, and which is accessible through our wallet, so with a simple login we can exchange any token, in any quantity and without problems.

It is also interesting how with some blockchains it is possible to leave orders open so as to be authorized automatically and take advantage of market changes to our advantage, so we can open a sell order with a high price or a buy order with a low price and all without check the progress, as the order will complete itself.

And in this way all the negative aspects that we had listed above are eliminated:

  • No recognition procedure
  • The funds remain in our possession
  • We can also list our assets at practically no cost

These protocols and platforms are found on almost every blockchain, such as Ethereum, EOS and Tron, to name the most famous and with a high volume, and for each blockchain there are at least 3 most important protocols that manage the majority of volumes.

But what are these protocols and how are they used?

The protocols are many but considering that their operation is almost identical, then we see that the main 3 for each blockchain have been investigated, namely Ethereum, EOS and Tron, in the book that explains the various topics in detail, which takes the name of "Mastering DeFi - A practical guide for beginners and the advanced", important because it not only explains the basics of this sector and the various steps of the various protocols, over 30, but it is also the only one that examines 3 different blockchains such as Ethereum (ETH), EOS and Tron (TRX).

book that analyzes the macro-categories of decentralized finance which are:

All organized into 8 chapters and also divided by blockchain so as to have a complete picture of what we find on the various blockchains and also make the relative comparisons to leave maximum freedom for anyone to use the blockchain they prefer without closing the door to others.

Over 30 protocols analyzed in detail and details, with relative fundamental steps, an indication of the various costs incurred to carry out the various transactions, so as to make the reader aware before he can interact with him.

Translated into 8 different languagesItalianEnglishGermanFrench, SpanishPortugueseDutch, and Japanese, so as not to exclude anyone from this revolution that is underway and will continue in the years to come.


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