A Comprehensive Comparison of Four Decentralized Exchanges

To date, over $1.3 billion have been stolen from centralized exchanged hacks. Hacks occur because centralized institutions hold the private keys of its users. With this knowledge, hackers only need to compromise the system of the exchange to access the private keys. They can then send stolen cryptocurrencies worth tens of millions of dollars to their preferred wallet destination. This glaring security weakness is a risk that most traders and investors take when buying and selling cryptocurrencies.

Enter decentralized exchanges (DEX).

Decentralized exchanges solve this security problem by eliminating the third-party service provider (centralized exchange) to facilitate the trade. Instead, trades occur directly between users through a peer-to-peer system. Without the need to deposit funds to a centralized exchange, users control their funds and their private keys all the time. Under this system, hackers need to compromise the system of thousands, if not millions of users, to steal millions of dollars worth of cryptocurrencies. That’s just not worth the effort.

DEX appears to be the magic bullet that can solve security problems and possibly pave the way for mass adoption. The promising potential of a DEX motivated us to look into Binance DEX, Resistance DEX, eFin, and Bisq to see what the future may hold.