Topic: Margin Trading on Centralized vs. Decentralized Exchanges (Read 58 times)

What is Margin Trading?

Simply put, margin trading refers to a trading technique that allows an investor to trade assets with funds provided by a third party (usually an entity). Thus, you can leverage their funds to trade assets and make some bucks yourself. This type of trading is mostly adopted by investors (both retail or institutional) who are low on funds but are interested in increasing their financial powers through assets trading.
Essentially, the funds from the third party enable the investor to trade with a bigger sum of money than the individual personally has. Of course, in most cases, your investment power determines your profit. Thus, getting financial assistance from such third parties also boosts your chances of earning more from your investment.
Margin Trading on Centralized Exchange
A centralized cryptocurrency exchange resembles traditional bank, stock market, or brokerage firm in many ways. Almost all the transactions and functionalities are completely controlled by one single central entity on the centralized exchanges. Thus, users of centralized exchanges are not the only ones with access to their account wallets’ private keys, giving the company in charge an absolute control over the transactions conducted on their platform.
You simply can’t make transactions without the involvement of the company in charge since your operations are limited to the mechanisms they provide. Such mechanisms are usually subjected to the approval of a central authority.
1. Security Challenges
Centralized exchanges are prone to severe security challenges. Over the years, hundreds of millions worth of digital currencies has been lost to cyberattacks, costing investors their hard-earned money.
2. Privacy Issues
Operating on centralized crypto exchanges exposes you to privacy issues too. Your privacy is not guaranteed when you take such a decision. For a start, a centralized exchange needs your card details, bank account number, and other personal data for operations. In case of a security breach, the losses are not just restricted to the assets but also to the sensitive user information. The consequences in such cases are beyond imagination.
The centralization also removes potential challenges in transaction tracking. Thus, your data can easily be traced back to you, increasing your vulnerability to attacks while breaching your privacy.
3. Hidden Costs
While Cryptocurrency transactions are supposedly based on trust and credibility, that’s not the case with centralized exchanges. Besides the normal transaction fee, they make traders on their platform pay some hidden charges that are usually not a part of the initial agreement until when it is difficult to back out of the transaction.
This is unarguably one of the biggest cases against these centralized cryptocurrency exchange. It is responsible for the quest for exchanges where transparency is the watchword.
Centralized Cryptocurrency exchanges’ flaws highlighted above are the major factors that necessitated the need for decentralized exchanges.
Margin Trading on Decentralized Exchanges
cryptocurrency exchange which operates in a decentralized way, i.e., without a central authority. Decentralized exchanges allow peer-to-peer trading of cryptocurrencies. In a nutshell, a decentralized cryptocurrency exchange is a direct opposite of what a centralized exchange represents. It offers cryptocurrency exchange services without taking users through the challenges that are synonymous to centralized exchanges.
Some of its outstanding qualities are:
· Better Security
One of the biggest advantages of a decentralized exchange is improved security over the centralized opponent. As a user, you are not obliged to put all your trust and confidence in the exchange. This is because you have your funds in your wallet and not held by a third party. Thus, you can implement more security strategies that will fortify your investment against hacking and other security challenges.
· Maximum Privacy
Privacy is another important element of decentralized exchanges. These exchanges don’t request your personal details. Your details are only required during transactions with another user that involves bank transfers. Mind you, you are not revealing your identity to the exchange but the other party involved in the transaction.
· No Hidden Charges
If you are put off by the hidden charges that characterize centralized exchanges, check the decentralized option out. Margin trading on decentralized exchanges such as DEC777 attract zero hidden charges and are more convenient as well.
DEC777 is Decentralized Defi Exchange built on top of 0x protocol that is considered the most transparent & reliable protocol to exchange / swap / lending — saving crypto assets or currencies. Our exchange or invest their digital assets without any risk and anonymously.
DEC777 promises to create a decentralized exchange completely different from other centralized exchanges. Trading volume and speed will be a bridge for investors, creating strong attraction for traders, P2p, loans and leverage … a different look around the world. An environment full of new technology and the most advanced, the technology beyond your imagination is existing at DEC777.
Best thing about Dec777 is all maker / taker transactions with DEC777 are truly free. All tokens are free to withdraw anytime and any where.