When choosing an exchange for crypto trading, it is worth studying everything carefully. And initially choose where to trade - on a centralized or decentralized one. What is the difference and who will win? DEX vs. CEX.
Let's get acquainted: centralized and decentralized platforms
Let's start with traditional exchanges - centralized platforms or CEX. The main feature is the management of the administration, which controls the funds. Popular centralized exchanges: Binance, ByBit, etc.
The essence of CEX. To buy crypto, you need to go to the platform, register, pass verification, and deposit dollars or another currency. Then the purchase takes place. The purchased cryptocurrency will appear in the account, it can be exchanged. But you are not the owner of the purchased crypto, because the exchange, like a regular bank, is a repository of your savings.
DEX is a different matter. Transactions on decentralized exchanges are carried out in the blockchain, not in the database. Popular platforms: Uniswap, SushiSwap, etc.
The main advantages of DEX are security and privacy. On centralized exchanges, actions are carried out through smart contracts - self-executing agreements in which the terms between the buyer and seller are written in the form of lines of code. When they are met by both parties, the contract is automatically executed. Such agreements provide trust and transparency, eliminating the need for intermediaries and reducing the risk of fraud in DEX. Let's consider the pros and cons of the two markets.
DEX vs. CEX
Traditional exchanges have advantages: the ability to exchange fiat money for cryptocurrency, greater liquidity, ease of use and more trading options. However, a beginner is unlikely to be familiar with margin trading and spot. Disadvantages of CEX:
- Know Your Customer (KYC)
On centralized exchanges, identity verification is required upon registration, otherwise you will not be able to trade.
- Not your coins
Centralized exchanges do not provide users with direct access to wallets; your funds are controlled by CEX. If the account to which the wallet is registered is blocked, the funds cannot be returned.
- Hacker attacks
Since CEX is a place to store funds, the platforms become targets for cybercriminals. In recent years, there have been many high-profile hacks of traditional exchanges - the platforms lost hundreds of billions of dollars.
These disadvantages were taken into account when creating decentralized exchanges. Let's consider the advantages of DEX:
- confidentiality
To trade on a decentralized exchange, you need to connect a wallet. DEX does not require any identity verification.
- security
DEX is considered safer than CEX. On decentralized platforms, the user's personal data will not end up in the hands of scammers.
- lack of control
DEX users have full control over their assets. Accounts cannot be frozen or blocked for withdrawal.
- high interest rates
On DEX, you can earn tens, hundreds, thousands of percent by trading crypto. The main thing is to understand when and where to go to trade.
- low commissions
Transfers without intermediaries provide a lower commission for large amounts in DEX. This is important when working with other countries. The speed of transfers in the blockchain is also higher. But when trading, the commission can be different - up to several hundred dollars.
We have familiarized ourselves with the exchanges, let's move on.
Copy trading on SEH
Copy trading is a way of trading that allows you to repeat transactions after another trader. Not a bad tactic for beginners, would you agree? Almost any exchange has a function with which you choose who the system will repeat transactions for: open and close positions. Traditional exchanges have protection against scams and the ability to trade on proven cryptocurrencies.
However, copy traders face a number of difficulties. The main one is that it is not profitable for centralized platforms to have many users copy successful traders. Therefore, there are few options to choose from on CEX. They mainly offer traders with a large deposit - 10 thousand dollars, 50 thousand and more. If he suffers a minus, which happens with a successful trading history, he can buy off and come out with a small plus. This type of trading is not suitable for you with a deposit 10 times smaller. Otherwise, your savings will be drained.
It turns out that there is a small selection of successful traders on CEX and a significant deposit is needed, approximately equal to the deposit of the one you are going to copy. You can also be lured by "decoys" - traders who try to make money on beginners, deliberately offering unprofitable deals. Bottom line: successful copy trading on CEX is almost impossible. This is a risky and hopeless undertaking.
Why should you choose DEX for copy trading?
Copy trading on decentralized platforms is a different world. More accessible, safer, more profitable. Advantages of copy trading on DEX:
- accessibility
To start trading, a thousand dollars and no leverage are enough.
- simple scheme
On DEX, you copy the deal of the selected trader for the amount you set. If the token is rolled over, you lose these funds, not the entire deposit. At the same time, it is not necessary to follow one raider.
- 24/7 trading
Trading on DEX occurs regardless of the market condition. Each exchange is its own mini-market. New coins appear on decentralized platforms every day, many of which quickly die. But for copy trading on DEX, this is a plus.
- DEX speed
ensures high trading speed. A deal can be closed in an average of 20 minutes.
- high profitability
You don't need to hold an open position for months. Sometimes a couple of minutes is enough to make 400-500%.
Another important point: there are various tools on DEX that simplify copy trading. If you arm yourself with them, you won't have to waste time searching for successful wallets. They help distinguish real traders from bots.
Risks of copy trading on DEX
Crypto trading is a risk. But it's one thing to constantly bump into something, and another to quickly recoup after a failure. There are many advantages to copy trading on DEX, but there are also risks:
- non-existent coins and scams
Most of the coins created today will no longer exist tomorrow. Moreover, there is a high probability of stumbling upon a scam. Good tools will help here.
- low liquidity of tokens
Many new tokens are created on DEX, and most of them have minimal liquidity when listed. Although exchanges recommend not to neglect this.
- actively searching
Searching for successful wallets manually is a waste of time and tedious work. In most cases, it also drains funds. Therefore, the right software is necessary.
Why is it worth choosing DEX for copy trading? It is convenient, safe and profitable. There are always risks, but with good tools even a beginner will come out on top. Successful deals!
Let's get acquainted: centralized and decentralized platforms
Let's start with traditional exchanges - centralized platforms or CEX. The main feature is the management of the administration, which controls the funds. Popular centralized exchanges: Binance, ByBit, etc.
The essence of CEX. To buy crypto, you need to go to the platform, register, pass verification, and deposit dollars or another currency. Then the purchase takes place. The purchased cryptocurrency will appear in the account, it can be exchanged. But you are not the owner of the purchased crypto, because the exchange, like a regular bank, is a repository of your savings.
DEX is a different matter. Transactions on decentralized exchanges are carried out in the blockchain, not in the database. Popular platforms: Uniswap, SushiSwap, etc.
The main advantages of DEX are security and privacy. On centralized exchanges, actions are carried out through smart contracts - self-executing agreements in which the terms between the buyer and seller are written in the form of lines of code. When they are met by both parties, the contract is automatically executed. Such agreements provide trust and transparency, eliminating the need for intermediaries and reducing the risk of fraud in DEX. Let's consider the pros and cons of the two markets.
DEX vs. CEX
Traditional exchanges have advantages: the ability to exchange fiat money for cryptocurrency, greater liquidity, ease of use and more trading options. However, a beginner is unlikely to be familiar with margin trading and spot. Disadvantages of CEX:
- Know Your Customer (KYC)
On centralized exchanges, identity verification is required upon registration, otherwise you will not be able to trade.
- Not your coins
Centralized exchanges do not provide users with direct access to wallets; your funds are controlled by CEX. If the account to which the wallet is registered is blocked, the funds cannot be returned.
- Hacker attacks
Since CEX is a place to store funds, the platforms become targets for cybercriminals. In recent years, there have been many high-profile hacks of traditional exchanges - the platforms lost hundreds of billions of dollars.
These disadvantages were taken into account when creating decentralized exchanges. Let's consider the advantages of DEX:
- confidentiality
To trade on a decentralized exchange, you need to connect a wallet. DEX does not require any identity verification.
- security
DEX is considered safer than CEX. On decentralized platforms, the user's personal data will not end up in the hands of scammers.
- lack of control
DEX users have full control over their assets. Accounts cannot be frozen or blocked for withdrawal.
- high interest rates
On DEX, you can earn tens, hundreds, thousands of percent by trading crypto. The main thing is to understand when and where to go to trade.
- low commissions
Transfers without intermediaries provide a lower commission for large amounts in DEX. This is important when working with other countries. The speed of transfers in the blockchain is also higher. But when trading, the commission can be different - up to several hundred dollars.
We have familiarized ourselves with the exchanges, let's move on.
Copy trading on SEH
Copy trading is a way of trading that allows you to repeat transactions after another trader. Not a bad tactic for beginners, would you agree? Almost any exchange has a function with which you choose who the system will repeat transactions for: open and close positions. Traditional exchanges have protection against scams and the ability to trade on proven cryptocurrencies.
However, copy traders face a number of difficulties. The main one is that it is not profitable for centralized platforms to have many users copy successful traders. Therefore, there are few options to choose from on CEX. They mainly offer traders with a large deposit - 10 thousand dollars, 50 thousand and more. If he suffers a minus, which happens with a successful trading history, he can buy off and come out with a small plus. This type of trading is not suitable for you with a deposit 10 times smaller. Otherwise, your savings will be drained.
It turns out that there is a small selection of successful traders on CEX and a significant deposit is needed, approximately equal to the deposit of the one you are going to copy. You can also be lured by "decoys" - traders who try to make money on beginners, deliberately offering unprofitable deals. Bottom line: successful copy trading on CEX is almost impossible. This is a risky and hopeless undertaking.
Why should you choose DEX for copy trading?
Copy trading on decentralized platforms is a different world. More accessible, safer, more profitable. Advantages of copy trading on DEX:
- accessibility
To start trading, a thousand dollars and no leverage are enough.
- simple scheme
On DEX, you copy the deal of the selected trader for the amount you set. If the token is rolled over, you lose these funds, not the entire deposit. At the same time, it is not necessary to follow one raider.
- 24/7 trading
Trading on DEX occurs regardless of the market condition. Each exchange is its own mini-market. New coins appear on decentralized platforms every day, many of which quickly die. But for copy trading on DEX, this is a plus.
- DEX speed
ensures high trading speed. A deal can be closed in an average of 20 minutes.
- high profitability
You don't need to hold an open position for months. Sometimes a couple of minutes is enough to make 400-500%.
Another important point: there are various tools on DEX that simplify copy trading. If you arm yourself with them, you won't have to waste time searching for successful wallets. They help distinguish real traders from bots.
Risks of copy trading on DEX
Crypto trading is a risk. But it's one thing to constantly bump into something, and another to quickly recoup after a failure. There are many advantages to copy trading on DEX, but there are also risks:
- non-existent coins and scams
Most of the coins created today will no longer exist tomorrow. Moreover, there is a high probability of stumbling upon a scam. Good tools will help here.
- low liquidity of tokens
Many new tokens are created on DEX, and most of them have minimal liquidity when listed. Although exchanges recommend not to neglect this.
- actively searching
Searching for successful wallets manually is a waste of time and tedious work. In most cases, it also drains funds. Therefore, the right software is necessary.
Why is it worth choosing DEX for copy trading? It is convenient, safe and profitable. There are always risks, but with good tools even a beginner will come out on top. Successful deals!