Our world is now accepting crypto as it is decentralized as we always hear. But do we really understand decentralized finance? Here’s what I saw from coindesk that may help us understand more about the technology behind decentralized finance
Note: DEX is Decentralized Exchanges
Unlike centralized exchanges like the NYSE, DEXs don't use the order book system, which has been used for decades and, to be quite honest, continues to work well today. The reason that DEXs don't use the time-proven order book system is because it requires a team of centralized individuals and technology to run. Instead, DEXs use smart contracts to facilitate trading. The smart contract that governs the trading on a DEX is called a liquidity pool.
- via coindesk
