A cryptocurrency trading platform is a website that provides speculators with the opportunity to exchange digital money among themselves and for fiat. Contracts are concluded in the trading window, where it is convenient to analyze and predict the behavior of the asset price with the help of tools.
Through connected payment systems, speculators conduct transactions.
Varieties of crypto exchanges
According to the type of management, there are two types of sites:
- Centralized – work at high speed, have good bandwidth. The disadvantage is the management of the center, the concentration of capital in the accounts of the exchange. This leads to frequent attacks by hackers.
- Decentralized — low speed of transactions, high level of security. In the future, they will gain an advantage over competitors.
By the end of 2021, decentralized trading platforms (DEXs) have become popular. Their activities are not controlled by regulators (government agencies or non-profit companies).
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Centralized exchanges (CEXs) have liquidity providers. These are large companies that cooperate with trading platforms. Liquidity providers have various assets in stock to organize sales. It is these companies that allow you to make instant trading transactions on exchanges. In DEX, the clients themselves act as liquidity providers.
On decentralized exchanges, users lock a couple of tokens in their own wallets using a smart contract. These assets are called the liquidity pool. The counterparty deposits one type of token into it and takes another. The crypto exchange itself does not participate in operations, which is why such services are called DEX.
Decentralized exchanges do not require customers to undergo identity verification due to the use of the principle of distribution. For this reason, cryptocurrency users remain anonymous on the DEX. They do not need to upload identification documents.
By less important criteria, the following types are known:
- Licensed and unregulated.
- With mandatory verification.
- Fiat and no traditional currency exchange.
- Futures, spot, p2p.
It is impossible to list all the criteria by which operators differ from each other. But they should be considered when looking for the right company.
Criteria for selection
The main search criterion is the compatibility of the exchange offers with the speculator’s trading style.
Consider what parameters are worth studying:
- Reliability and reputation. They are identified by a genuine license and a large number of positive reviews. If the owners hide information about themselves or there are a lot of well-founded complaints, there is a reason to move on to looking for another exchange.
- Commission. The average value is considered to be 0.2%. The amount of the fee varies for takers and makers. You should filter the operators that charge non-trading commissions.
- Trading pairs. A large amount of financial instruments is welcome. But more important is the presence in it of pairs with which the trader knows how to trade.
- Financial turnover. The high liquidity of a large number of coins is a plus. The indicators of capitalization and daily turnover draw prospects for the speed of transactions.
- Support. It depends on the professionalism of the support and how quickly the trader will get out of the impasse.
