Centralization means that there is one central authority or a group of authorities that control your funds and thus freeze or delete them.
Decentralization means that there is no single authority that can do this, and to achieve this, it requires many parties to meet on something that may not happen, for example, in Bitcoin, the longest chain (more than 51%) can make changes in many things, but it is difficult for one central party or several central parties to do so.
In DeFi, if they are based on the same blockchain, they are managed by a smart contract, and if the currency is decentralized, the platform can be decentralized.
As for the exchanges between several blockchains, they are centralized at some point.
Topic: How is DeFI exactly Decentralized ? - page 2. (Read 327 times)
you still need to do a Deposit to be able to trade.
I've seen only 1 dex that was forcing me to deposit funds and it was DYDX (decentralized futures trading). Spot trading (or rather swaping coins) doesn't need that. All dexes that I was using (pancakeswap, uniswap and few others) needed you to connect wallet and approve usage of token only.
FTX is not defi (afaik).
Of man where were you last 4 months?
-snip-
So if the Defi exchange goes bankrupt like FTX, your assets are also going to be lost.
So if the Defi exchange goes bankrupt like FTX, your assets are also going to be lost.
FTX is not defi (afaik). But if they also offer a defi product (truly a provable defi), then it's too complicated to analyze. I don't even think that funds were lost in the first place as I have never heard of any claims from customers regarding defi FTX products. But that doesn't mean defi can't go bankrupt, it can be caused by liquidity matters , smart contract vulnerabilities, or other factors.
Your funds are deposited to a smart contract that will manage your funds, not necessarily a centralized custodian that would hold your funds. Think of it as a wallet that's controlled by code. These "DEXs" can't necessarily go bankrupt, but the risks are with concerning exploits and stuff.
^Also, not all DEXs have this model. Some DEXs need to get a hold of your funds because it needs to if you're trading futures/etc. On the other hand, with spot market trading like Uniswap, you don't necessarily need to deposit.
But yea, the "decentralized" definition in contrast to DEXs is a slippery slope — it's going to depend on how you look at it. A far more better description is "non-custodial".
^Also, not all DEXs have this model. Some DEXs need to get a hold of your funds because it needs to if you're trading futures/etc. On the other hand, with spot market trading like Uniswap, you don't necessarily need to deposit.
But yea, the "decentralized" definition in contrast to DEXs is a slippery slope — it's going to depend on how you look at it. A far more better description is "non-custodial".
Ok so I am learning lots about DeFI and NFTs. I am watching videos on how these Defi exchanges work, also reading the user guides and trying to follow the money by looking at the blockchain.
From what I understand. You generally use Metamask and this is used to Connect your Metamask to some Defi exchange you want to use. However this is where I am confused.
In these videos AND from the "getting started" guide, after you connect your Metamask, you still need to do a Deposit to be able to trade. So after you make a deposit, the funds are REMOVED from your Metamask and appear in the Defi exchange account balance. It doesn't stay in your Metamask account so you no longer have control of those funds.
So if the Defi exchange goes bankrupt like FTX, your assets are also going to be lost. So it still seems centralized. Only difference is instead of using a username/password/2fa to login to the website all you do is use your Metamask to login.
Can someone explain what the hype is about these Defi exchanges ? Because to me it still seems centralized.
From what I understand. You generally use Metamask and this is used to Connect your Metamask to some Defi exchange you want to use. However this is where I am confused.
In these videos AND from the "getting started" guide, after you connect your Metamask, you still need to do a Deposit to be able to trade. So after you make a deposit, the funds are REMOVED from your Metamask and appear in the Defi exchange account balance. It doesn't stay in your Metamask account so you no longer have control of those funds.
So if the Defi exchange goes bankrupt like FTX, your assets are also going to be lost. So it still seems centralized. Only difference is instead of using a username/password/2fa to login to the website all you do is use your Metamask to login.
Can someone explain what the hype is about these Defi exchanges ? Because to me it still seems centralized.
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