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Overview

Decentralized exchanges are decentralized financial (DeFi) platforms that operate without a central authority, unlike centralized exchanges, allowing users to transact peer-to-peer from wallet to wallet whilst maintaining complete control of their assets.
There are a number of DeFi applications built on the Avalanche blockchain that offer different services and features like lending and swapping crypto, staking Avalanche native tokens, many of which also allow cross-chain trading.
DEXes help to reduce the risk of price manipulation, as well as hacking and theft because crypto assets are never in the custody of the exchange itself.

Key Takeaways For Creators and Collectors

Complete decentralization is not possible for the time being as it’s still necessary to use centralized exchanges to initially fund a wallet in exchange for fiat currency. Still, creators and collectors can benefit from these platforms by being able to:
  • Trade cryptocurrency with cryptocurrency to receive the equivalent value thereof and diversify your portfolio with smaller token not found on centralized exchanges
  • Incredibly high interest staking to make more cryptocurrency from your portfolio as opposed to simply “hodling” it long-term in your wallet (holding on for dear life)
  • Supply tokens as collateral to earn interest and enable lending or borrow tokens against your collateral
* high-interest Defi products are risky, DYOR before investing
‍Want to learn more about decentralized exchanges?
Check out our comparison of leading Avalanche DEXes.