Where assets are traded.
WHAT A CENTRALISED EXCHANGE IS
A company matching buyers and sellers, holding customer assets.
WHAT IT PROVIDES
Familiar interfaces Liquidity Conversion to and from ordinary currency Customer support
WHAT IT REQUIRES
Identity verification Trust in the operator
WHAT AN ORDER BOOK IS
A record of outstanding buy and sell orders at each price.
WHAT ORDER TYPES EXIST
- Market: executing immediately at available prices
- Limit: executing only at a specified price or better
- Stop: triggering when a price is reached
WHAT SLIPPAGE IS
Receiving a worse price than expected, because the order consumed available liquidity.
WHERE IT MATTERS MOST
Thin markets, and large orders.
WHAT A DECENTRALISED EXCHANGE IS
Trading through contracts, with users retaining custody.
WHAT IT PROVIDES
No account or verification No custody risk
WHAT IT COSTS
Transaction fees No recourse Exposure to contract risk
WHAT TO UNDERSTAND ABOUT CUSTODY ON EXCHANGES
Assets held there are a claim on the exchange.
WHAT HISTORY DEMONSTRATES
Exchanges have failed, been hacked, and misused customer funds.
WHAT TO DO
Withdraw anything not actively being traded.
