DEXs AND CEXs

Decentralized exchanges (DEX) are a type of cryptocurrency exchange that enables direct peer-to-peer cryptocurrency transactions to occur online securely and without the need for an intermediary.

A blockchain or distributed ledger replaces the typical third party entities that would normally oversee asset security and transfer (e.g. banks, stockbrokers, online payment gateways, government institutions, etc.) in transactions made through decentralized exchanges. Some common methods of operation include the use of smart contracts or order book relaying, though many other variations and degrees of decentralization are possible.

In other word, A decentralized exchange (better known as a DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, payment processors, or any other kind of intermediary. The most popular DEXs — like Uniswap, and Sushiswap — utilize the Ethereum blockchain and are part of the growing suite of decentralized finance (DeFi) tools. another example is pancakeswap and KnightSwap which make a huge range of financial services available directly from a compatible crypto wallet. DEXs are booming — in the first quarter of 2021, $217 billion in transactions flowed through decentralized exchanges. As of April 2021, there were more than two million DeFi traders, a ten-fold increase from May 2020.

How do DEXs function?

↪️DEXs, unlike centralized exchanges like Coinbase, do not allow for fiat-to-crypto exchanges; instead, they only trade cryptocurrency tokens for other cryptocurrency tokens. You can trade fiat for crypto (and vice versa) or crypto-crypto pairs — for example, some of your bitcoin for ETH — using a centralized exchange (or CEX). More advanced moves, such as margin trades or setting limit orders, are frequently available. All of these transactions, however, are handled by the exchange itself through a "order book" that establishes the price for a specific cryptocurrency based on current buy and sell orders — the same method used by stock exchanges such as Nasdaq.

↪️↪️Decentralized exchanges, on the other hand, are nothing more than a collection of smart contracts. They use algorithms to determine the prices of various cryptocurrencies against one another, and "liquidity pools," in which investors lock funds in exchange for interest-like rewards, to facilitate trades.
While centralized exchange transactions are recorded on the exchange’s internal database, DEX transactions are settled directly on the blockchain.
↪️↪️DEXs are typically built with open-source code, allowing anyone with an interest to see exactly how they work. This also means that developers can reuse existing code to create new competing projects, as Sushiswap and Pancakeswap have done with Uniswap’s code.

What are centralize exchanges (CEX)

Centralized exchanges (CEXs) are large-scale organizations that coordinate cryptocurrency trading, similar to traditional asset exchanges such as stock exchanges.
Exchanges are, in essence, marketplaces. They are useful when a large number of people are attempting to buy and sell the same type of asset at the same time. Famous exchanges in the traditional economy include the New York Stock Exchange and the London Metal Exchange. Binance, Coinbase, Gemini, and Kraken are some well-known cryptocurrency exchanges.
Centralized cryptocurrency exchanges participate in markets directly by "clearing" trades. They typically keep digital order books, which are lists of open buy and sell orders with volume and price information. They connect buyers and sellers and announce current market prices based on their findings.
on the most recent price at which an asset was sold
CEXs typically provide additional services such as crypto asset custody. They frequently require users to deposit their crypto assets at the exchange before trading can take place.
According to a 2021 report by global accounting firm KPMG, exchanges are the most valuable businesses in the crypto world.
CEXs are still far more common than decentralized exchanges in February 2022. (DEXs). KPMG discovered that they accounted for approximately 95% of exchange crypto trading. Binance is the world's largest cryptocurrency exchange, though it has launched its own DEX. The centralized Binance exchange processes more than $20 billion in transactions per day, whereas the largest DEX Uniswap processes less than $2 billion.

DIFFERENT BETWEEN CEXS AND DEXS.

Centralized exchanges can be used to conduct trades from fiat to cryptocurrency (or vice versa). They can also be used to conduct trades between two different cryptocurrencies.

Decentralized exchanges are an alternative; they cut out the middle man, generating what is often thought of as a "trustless" environment. These types of exchanges function as peer-to-peer exchanges. Assets are never held by an escrow service, and transactions are done entirely based on smart contracts and atomic swaps.

The crucial difference between centralized and decentralized exchanges is whether or not a middle man is present. Decentralized exchanges are less widespread and less popular as compared with centralized exchanges. Nonetheless, there are more decentralized exchanges all the time, and it's possible that they will give centralized exchanges a run for their money in the future.

Why Glitch_guild chose DEXs as it first listing platform.

➡️Vast variety: If you’re interested in finding a hot token in its infancy, DeFi is the place to be. DEXs offer a virtually limitless range of tokens, from the well-known to the weird and totally random. That’s because anyone can mint an Ethereum-based token and create a liquidity pool for it, so you’ll find a greater array of projects, both vetted and unvetted. (Buyer definitely beware!)

➡️➡️Hacking risks can be reduced: Because all of the funds in a DEX trade are stored on the traders’ own wallets, they are theoretically less susceptible to a hack. (Relatedly, DEXs also reduce what is known as “counterparty risk,” which is the likelihood that one of the involved parties — including potentially the central authority in a non-DeFi transaction — will default.)

➡️➡️➡️Anonymity: No personal information is required to use most popular DEXs.

➡️➡️➡️➡️Utility in the developing world: The peer-to-peer lending, speedy transactions, and anonymity made possible by DEXs have made them increasingly popular in developing economies — where solid banking infrastructure might not be available. Anyone with a smartphone and an internet connection can trade via a DEX.

Point to Note:

Each DEX has their own unique method, but for the glitch_guild project which will be listed on KnightSwap and Knight ecosystem our focus would be to provide our investors with tools that will generate them reliable & sustainable yields on their investments. These tools can be labeled under the DeFi category of Yield Farming in KnightSwap ecosystem.

Why should liquidity be provided? investors provide liquidity?

The glitch_guild will provide liquidity so as to enable users and investors trade easily with low fees and earn percentage on others investors trading fees. This system is common use in the Knight ecosystem investors provide liquidity on their decentralized location and trading for low fees like 2%,and also earning 17% of the 2% of other investors trading fees.

This liquidity supplied to the DEX forms a pool that is not owned by a central body & will now allow users to safely trade cryptocurrency P2P. If the supply within the liquidity pool is provided by many investors, then this would reduce the risk of any one person removing the bulk of liquidity (not allowing for safe trading) and or being hacked and having all funds removed which is a big fear for CEX.

The additional incentive for users providing liquidity would be the use of glitch_guild farm under knight Ecosystem farms. By providing liquidity investors can now deposit them into our farms such as, $GLTCH, $KNIGHT which are the sponsors, BUSD, this would earn them an additional percentage, e.g 130. In knight ecosystem. (at the time of this writing) or partner farms such as GUARD BUSD having 8.25% APR with over 40 million in liquidity.
When you stake $GLTCH earn
$GLTCH rewards;

Use $GLTCH tokens to pay for services in its network.

Stake $GLTCH to vote and participate in the guild development;Stake $GLTCH for exclusive content, Stake $GLTCH for token rewards of our partners;

In summary:
The beauty of earning a DEX token is that as long as the DEX continues operations there will always be opportunities to use the DEX token to earn other tokens without having to spend more money.

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