Decentralised exchanges see volume rise but are not without risk
In recent weeks, as multiple centralised exchanges have experienced liquidity issues, traders have flocked to DEXs to push volumes to levels not seen since May. Decentralised exchanges (DEX) are smart-contract applications that facilitate peer-to-peer trading through the use of liquidity pools and automated market-markers (AMMs).
The stable side of the market
When markets go through periods of high volatility, a flight to safety in the form of cash is expected. Likewise, for digital assets an uptick in stablecoin usage is one of the few predictable outcomes of market turbulence. Stablecoins, however, carry inherent risks — with market participants forced to choose between protocol-native stablecoins, such as DAI (MakerDAO) , or centralised market leaders, such as USDC (Circle) and USDT (Tether).
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