In the traditional finance world, intermediaries like banks provide financial services to individuals and companies. But what if one day you could lend and borrow money without the need of a bank or financial institution to approve your loans? That is what crypto-borrowing, or DeFi, is all about. DeFi stands for Decentralized Finance, and it is turning over a new leaf in the traditional finance industry by creating a peer-to-peer financial ecosystem that does not rely on any intermediary for lending or borrowing funds.
The term Defi is used to describe a variety of applications and projects in the blockchain space that are aimed at disrupting traditional finance. Inspired by the technology, Defi refers to financial applications built on blockchain technologies, typically using smart contracts. Smart contracts are automated agreements that do not need intermediaries to execute and can be accessed by anyone with an internet connection.
Decentralized exchanges, or DEXs, are new-age cryptocurrency exchanges. They function with more autonomy and security as compared to their centralized counterparts. A decentralized exchange is an exchange market that does not rely on a third-party service to store its clients’ cryptocurrencies or USDT. Decentralized exchanges, or DEXs, are peer-to-peer marketplaces where traders can securely and directly exchange cryptocurrencies without the need for an intermediary. The trade can be performed in real time with minimal transaction fees. In comparison to traditional centralized exchanges, where users typically experience a degree of latency due to the processing time taken by the intermediary or custodian, a decentralized exchange enables near-instantaneous transactions via smart contracts. Using smart contracts, these transactions are facilitated between users on a blockchain. In other words, DEX users trade cryptocurrencies using smart contracts rather than using exchanges such as Coinbase or Binance that store cryptocurrency balances in a centralized ledger. Decentralized exchanges promote the use of cryptocurrency rather than fiat currencies because they allow users to control their private keys.
How does it work?
Decentralized exchanges operate on top of a blockchain network and allow users to keep custody of their funds at all times. The primary appeal of using a decentralized exchange is its lack of central authority, as opposed to a centralized exchange that acts as a middleman between buyers and sellers. The lack of third-party intervention on DEXs also lends itself well to censorship resistance, leading some to call it the future for exchange.
Here is how a Decentralized Exchange works
- Individuals can use their wallet address to log onto a DEX platform.
- On logging in, they can submit a purchase or sell order on the exchange. ● Users who want to sell tokens or coins on the exchange must first indicate the number of tokens they want to swap, the price, and the time until the asset is accessible for exchange.
- All the following information is integrated into the smart contract.
- Bidders can submit their offers by signing a buy order.
- Once the time is up, all the bids are examined and implemented by both parties.
- Smart Contracts carry out this execution, and the asset transfer is started.
Let's talk about some interesting features of DEX.
Trade from any device at any time with the push of a button.
You have complete control over your assets and can always withdraw your fund.
Higher liquidity due to higher trading volumes from lower spreads and lower fees.
Access to multiple digital assets, no risk of centralized points of failure, and no single point of entry for hackers.
DEX provides the same level of transparency and security as a CEX
Users can quietly and anonymously trade one cryptocurrency for another on DEX exchanges.
- User Verification & Authorization
- User- Friendly interface
- Trading Engine
- Transaction History
- Push notification
- Order book
Process to Generate new tokens
Staking and Minting are how we generate the new tokens using the network. The process involves 3 steps
locking down your tokens for a period of time,
during this period, all of the Network Members are staking their tokens to mine new tokens.
after maturity, you will receive all of the mined tokens as a reward, but now you need to wait for another period of time to start mining again.
How to get your own DEX platform
Mobiloitte is a decentralized exchange development company; we help our clients to design, develop and deploy their own cryptocurrency exchange platform with our exclusive DEX solutions. Our team of developers is ready to help you deploy high-end Decentralized Development Solutions at an affordable price. We have provided our clients with full-cycle development – from business analysis and planning to software development, testing, and promotion. Our aim is to create a truly decentralized exchange for peer-to-peer transactions, all powered by blockchain technology.