Too Long; Didn't Read
Decentralized exchanges (DEXs) have come a long way since the launch of the first DEX, NXT Asset Exchange, in 2014. The introduction of Automated Market Making (AMM) in 2018, as seen with Uniswap, has revolutionized the DEX space and set the standard for most DEXs today. AMM allows for the automation of the market-making process for digital asset exchanges using a smart contract-powered price algorithm that defines prices based on demand and supply. Despite their growth, DEXs still face challenges in achieving mass adoption, including liquidity, scalability and high fees on layer-1 protocols, user experience, regulatory compliance, and security. Despite these hurdles, the future of DEXs looks bright as the market continues to mature and new solutions are developed to address these challenges.