In the present scenario, cryptocurrency and Blockchain are broadly adopted by people around the world. When the first cryptocurrency was introduced, people were unaware of its value and purpose.
At the time of the Covid pandemic, crypto has grown exponentially. The people started realizing the value and purpose of cryptocurrency. The cryptocurrency can be bought through cryptocurrency exchanges.
There are various types of cryptocurrency exchanges like
- Centralized Cryptocurrency Exchange
- Decentralized Cryptocurrency Exchange
- Peer to Peer Cryptocurrency Exchange
Centralized Cryptocurrency Exchange (CEX)
The centralized crypto exchange allows the user to trade cryptocurrencies like Bitcoin, Ethereum, Litecoin, XRP, etc. The trading is executed with the three types of order books like Limit order, Stop limit order, and Market order.
The user needs to get registered by providing the KYC details. Users can buy and sell cryptos using the exchange allocated crypto wallets. The trading fee, deposit fee, and withdrawal fee, & listing fees are the source of income in the cryptocurrency exchanges.
Fees are collected as a fractional amount of the cryptocurrencies being traded by the user. The user can trade fiat to crypto, crypto to crypto trading according to the available modes of trading in the exchange platform. The user can buy and sell cryptocurrencies using multiple payment methods like credit and debit cards, bank transfers, or via third-party providers.
Decentralized Cryptocurrency Exchange (DEX)
The decentralized cryptocurrency exchanges are the trading that occurs among the traders over the various trading platforms with the help of automated marketing makers. The trading between the traders takes place with the help of smart contracts.
The smart contract is the precisely defined set of conditions among the parties involved in the transaction. DEX helps to overcome the lacking areas of the centralized exchanges. DEX helps the user to trade digital assets using the liquidity pools. The user gets income and token rewards.
The token rewards can be utility tokens and governance tokens. Utility tokens can help to ripen the crypto or fiat currency. Governance token helps the user to take part in community activities like voting.
DEX helps the user to get complete control over their digital assets anonymously without providing identity details.
Peer to Peer Cryptocurrency Exchange
The peer-to-peer is completely different from the CEX and DEX exchanges. The user is allowed to choose their trading pair as per their requirements. The Buyer and Seller create ads and post them on the exchange.
The buyer posts ads with specific demands. The same way sellers post the ads with details like type of crypto, preferred payment methods, and price. Once the seller and buyer get the required trade match they can initiate trade among them.
Buyer and seller can contact each other directly via the chat option on the exchange. The trading fee, ads fee, & listing fees are the monetization in the cryptocurrency exchanges. Escrow service is available to provide smooth trading between the buyer and seller.
Escrow is enabled to eliminate unlawful traders or spammers to ensure the security of user cryptocurrencies. Escrow also helps to resolve the dispute between the buyer and seller.
If you are ready to start your crypto business with CEX, DEX, and P2P, then you are in the right place!
Zodeak, being a reputed cryptocurrency exchange development company. We have an adroit team of developers with adequate knowledge in the crypto and Blockchain domain. We are using an advanced tech stack to provide an efficient trading platform.
We aim to offer a trading platform that is exclusively efficient in performance for the present and future business scopes. We have ready-made scripts like Binance clone, LocalBitcoins clone, Paxful clone, Remitano clone & Wazirx clone, etc.
We have a dedicated team of developers for creating a trading platform from scratch as per the client’s business demands.
