Animecoin (ANIME) is a project aiming to transform the anime industry by uniting fans, creators and IPs through blockchain technology. Popular NFT collection Azuki is an early contributor to the project. Learn more now!

 (ANIME) is set to revolutionize the anime digital industry by creating a community-driven, decentralized ecosystem. Positioned as the "culture coin" of the anime world, Animecoin aims to empower over a billion anime fans globally to shape and own the future of anime. Through its Full Stack Anime approach, Animecoin combines original IP creation, mainstream distribution and specialized infrastructure to create an unprecedented digital economy for its community.

, the popular NFT project at the heart of this movement, plays a crucial role in connecting anime fans to its evolving ecosystem. As the anime industry continues to grow rapidly, Animecoin and Azuki together offer a unique opportunity to reshape the creative and economic landscape of the anime world.

In this article, we’ll explore the key features of Animecoin, its relationship with Azuki and the ways in which both projects are poised to transform the global anime industry.

Animecoin (ANIME) is a project aiming to transform the anime industry by uniting fans, creators and IPs through blockchain technology. Powered by Animechain, it provides a cohesive experience that merges the fragmented aspects of the anime world, such as viewing, discussion and merchandise into a single integrated protocol. 

Animecoin offers an opportunity for creators to earn royalties based on fan engagement, and for fans to shape the future of anime.

The highly anticipated Animecoin launch and airdrop will take place on Jan 23, 2025, marking a significant step toward Anime 2.0 and solidifying Animecoin’s role in revolutionizing the industry by enabling deeper connections between fans and creators.

 is a pioneering NFT project that combines the power of anime-style illustrations with 

. Launched in January 2022, the project quickly captured the attention of both the NFT and anime communities, amassing over $300M in sales. Its success is attributed to its unique blend of stunning visuals, anime culture and community-driven vision. Azuki's collection consists of 10,000 anime avatars, each serving as a key to The Garden, an exclusive metaverse in which 

 enthusiasts, artists and builders collaborate to create a decentralized future.

The Azuki ecosystem extends beyond NFTs, incorporating various projects aimed at strengthening its community and expanding its influence in the web3 space. With a passionate anonymous team and growing fanbase, Azuki has cemented its place as a leading player in the intersection of anime, NFTs and decentralized innovation.

 is a purpose-built blockchain designed to bring the global anime network on-chain, creating an ecosystem governed by creators and participants. Its mission is to enhance fan engagement at every touchpoint, allowing the community to share in the success of the anime industry. Built in collaboration with 

 infrastructure for DeFi, gaming and NFTs, Animechain offers low-cost, high-speed transactions, making it an ideal network for scaling the anime space.

The platform's first major partner is Azuki, which will launch its anime productions, games and physical products on Animechain, setting a precedent for other top-tier anime IPs to follow. By providing open access to fandom data, IP and collectibles on-chain, Animechain reduces barriers to entry and fosters a more accessible, decentralized anime ecosystem

 a self-sustaining ecosystem that’s driven by the synergy between blockchain infrastructure, consumer platforms and intellectual property (IP). The goal is to create a flywheel effect, whereby each component amplifies the others' growth.

At its core, Animecoin is built on Animechain, an L3 blockchain powered by Arbitrum Orbit technology. Animecoin acts as the custom gas token, simplifying the process for Web 2.0 anime fans. By eliminating the need to manage multiple tokens, the platform also offers gasless (sponsored) transactions, ensuring a smooth onboarding experience for newcomers.

The ecosystem is designed to attract both users and developers. Consumer platforms such as Anime.com aim to onboard Web 2.0 users, becoming the dominant social layer for the anime industry — similar to the way that Discord has become essential for gaming communities. As the user base grows it attracts more developers, driving further innovation.

Content and IP development serve as the cultural backbone of Animecoin, uniting its community and fueling the passion that powers the entire ecosystem.

The ANIME token is the native utility token of the ecosystem, designed to fuel the digital economy and power the anime industry on-chain. It will be launching on both Ethereum and Arbitrum, with a significant portion — 50.5% of the total supply — going to its community. ANIME will serve as Animechain’s gas token, enabling transactions and rewarding users and creators alike. It will also be used for governance matters, giving holders a say in the direction of the Animecoin ecosystem through the future AnimeDAO.

The ANIME tokenomics structure is designed to ensure sustainable growth and active community involvement. The following breaks down its distribution:

The ANIME airdrop is open to several key communities, including the Azuki community, Hyperliquid (HYPE stakers), Kaito yappers, Arbitrum communities and anime fans who align with the Animecoin vision.

Animecoin aims to revolutionize the anime industry with the launch of Animechain, powered by the ANIME token. The road map includes onboarding millions of fans, expanding the ecosystem with new IPs and building innovative consumer applications. With Azuki as a pioneer, Animecoin is poised to set the on-chain future of anime culture.

Beginner

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Animecoin (ANIME): Azuki Open Universe Token

The Banana Zone is a crypto market phase characterized by accelerated upward price movements, creating a banana-shaped trajectory on price charts. Learn more.

The crypto market has a new buzzword that's taking over trading floors and social media: the Banana Zone. Coined by macro investor and Real Vision CEO Raoul Pal, this concept has become increasingly relevant as crypto markets experience unprecedented growth.

But what is the Banana Zone, and why does it matter? As the crypto market appears to be entering its most explosive phase yet, this article breaks down the three key stages of this phenomenon, explores why it occurs and provides essential tips for navigating current market conditions.

The Banana Zone is a cryptocurrency market phase characterized by accelerated upward price movements, creating a banana-shaped trajectory on price charts. The term was popularized by global macro investor Raoul Pal in 2024, drawing from his observations of recurring patterns in crypto market cycles since 2008. 

Raoul Pal notes that as global liquidity rises and institutional adoption increases, cryptocurrencies enter this distinctive phase in which price appreciation accelerates beyond typical market behavior.

While initially observed in Bitcoin's price action, the Banana Zone phenomenon extends across the broader cryptocurrency market, affecting everything from major 

 to emerging digital assets. This pattern has become particularly relevant as traditional financial markets and crypto markets show increasing correlation with global liquidity cycles.

The Banana Zone works as a three-phase market cycle, each with distinct characteristics that signal different stages of market maturity and price action. These phases typically unfold sequentially, though their duration and intensity vary based on global macro factors.

The first phase is characterized by a decisive breakout from previous consolidation patterns, typically triggered by increased institutional adoption and improved market fundamentals. Bitcoin usually leads the charge during this early bull marketphase, experiencing substantial price appreciation while maintaining high market dominance.

This initial phase closely correlates with expanding global liquidity, as central banks' monetary policies create favorable conditions for risk assets. The market sees steady accumulation by long-term holders and institutional investors, establishing a solid foundation for further growth.

The Banana Singularity is the most explosive phase of the cycle, marked by broader market participation and a dramatic surge in altcoin valuations. During this phase, the total cryptocurrency market capitalization grows exponentially as retail investors flood the market, seeking high-return opportunities beyond Bitcoin.

This phase typically coincides with a decrease in 

 as capital flows from Bitcoin into altcoins, creating what's commonly known as "altseason." The market experiences widespread 

 (fear of missing out), leading to rapid price appreciation across virtually all crypto assets.

The final phase, known as the concentration phase, sees market momentum focusing on "core winners" — cryptocurrencies with strong fundamentals and real-world utility. During this period, investors become more selective, leading to a flight to quality within the crypto ecosystem.

This phase often experiences the highest price appreciation for selected assets, though the broader market may begin showing signs of exhaustion. Institutional investors typically concentrate their positions in established cryptocurrencies with proven track records and strong network effects.

The Banana Zone phenomenon is primarily driven by the intersection of global liquidity cycles and cryptocurrency market dynamics. Since 2008, when central banks reset interest payments to nearly zero and standardized debt maturity to between three and four years, a predictable macro cycle emerged that directly influences crypto market behavior.

As central banks manage their debt rollovers through currency debasement, the value of fiat currencies relative to assets decreases. This process naturally drives up the price of growth assets, with cryptocurrencies experiencing pronounced effects due to either their fixed or 

The acceleration of institutional adoption further amplifies these effects. 

 comparing active wallets and early IP addresses, crypto is being adopted at twice the speed of internet adoption in the 1990s. 

Market psychology also plays a significant role. Media attention increases as prices rise during the Banana Zone’s initial phase, drawing in new participants. This creates a self-reinforcing cycle whereby price appreciation leads to greater adoption, which drives further price appreciation — a pattern that intensifies during the Banana Singularity phase.

Importantly, the Banana Zone's occurrence aligns with broader market cycles, including what Raoul Pal calls 

, a framework that explains how business cycles repeat as liquidity rises to service debt rollovers. This synchronization with traditional market cycles helps explain why crypto markets often move in tandem with other growth assets, particularly technology stocks.

As of early 2025, the cryptocurrency market is showing strong indications of being in the transitional period between Banana Zone Phase 1 and the anticipated Banana Singularity. With Bitcoin’s price hovering around $100,000, and total market cap reaching $3.7 trillion in December 2024, the crypto market has already demonstrated significant strength following an earlier breakout.

Bitcoin's recent consolidation at all-time high levels mirrors similar patterns in the 2016–2017 cycle, suggesting the crypto market is preparing for its next major move. In addition, the drop in Bitcoin dominance from 61.52% in November 2024 to 57.18% today (mid-January 2025) indicates that capital is flowing into the broader crypto market, potentially hinting at an upcoming altcoin season. 

Global macro conditions appear particularly favorable for entering into the Banana Singularity phase. With many central banks implementing 

 in September 2024, a global shift toward monetary easing could create ideal conditions for crypto asset appreciation.

Market structure analysis reveals increasing strength across the crypto sector, with key indicators showing higher lows and higher highs in the total market cap. Declining channels and the breaking of long-term resistance levels suggest building momentum for the anticipated surge into the Banana Singularity phase.

However, investors should note potential headwinds, including geopolitical tensions in the Middle East and uncertainty surrounding the U.S. presidential transition. These factors could introduce short-term volatility, though the underlying trend remains strongly bullish, according to current market indicators.

Successfully navigating the Banana Zone requires a structured approach and disciplined execution. Following are the five key areas investors should focus on in order to maximize opportunities while managing risks during this explosive market phase.

 are crucial during the Banana Zone's volatile phases. Investors should consider implementing a scaled approach to their investments, gradually increasing exposure as market confirmations appear, rather than making large, single-entry investments.

Diversification takes on new importance during the Banana Singularity phase. While Bitcoin typically leads the initial phase, maintaining a balanced portfolio of established cryptocurrencies and carefully selected altcoins can help capitalize on broader market momentum. However, investors should resist the temptation to chase every trending token.

 and maintaining emotional discipline is critical. While markets making new all-time highs can create strong FOMO, successfully navigating the explosive Banana Zone requires avoiding impulsive decisions based on short-term price movements.

Technical analysis should be combined with macro awareness. Monitoring global liquidity indicators, institutional fund flows and broader market sentiment provides crucial context for timing entries and exits. Pay particular attention to Bitcoin's dominance ratio to indicate which phase the market is entering.

Regular portfolio rebalancing becomes essential during periods of high volatility. As certain assets outperform others, maintaining target allocations helps manage risk, even as you stay exposed to potential upside. Take partial profits during extreme price surges, while maintaining core positions for longer-term appreciation.

The trajectory of cryptocurrency markets appears poised for significant expansion, with 

 the total market cap could grow from its current $3.7 trillion to potentially $100 trillion over the coming years. 

Institutional integration continues to deepen, with traditional financial systems increasingly embracing cryptocurrency infrastructure. The resolution of regulatory uncertainties is expected to remove significant barriers to adoption, potentially accelerating the crypto market's evolution beyond current Banana Zone dynamics.

Moreover, technological advances in scalability and interoperability are paving the way for widespread cryptocurrency adoption. The integration with traditional finance and the emergence of new use cases — from artificial intelligence (AI) to 

 tokenization — suggests future Banana Zones may be characterized by more stable, utility-driven growth, rather than pure speculation.

The Banana Zone represents a unique framework for understanding cryptocurrency market cycles. With it currently suggesting a move from the initial breakout to the anticipated Banana Singularity, crypto markets are entering their most significant growth phase.

With global liquidity expanding and institutional adoption accelerating, conditions appear ripe for continued market appreciation. However, investors should remember that explosive gains come with heightened risks. Success in these markets requires disciplined risk management and strategic positioning — not just blind optimism.

Intermediate

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Banana Zone to Singularity: Analyzing Crypto's Upward Surge

Learn more about Melania Meme (MELANIA), the meme coin launched by the wife of Donald Trump and First Lady of the United States.

 meme project has captured the crypto community's attention, sparking curiosity and debate. Launched amidst the growing trend of meme coins, it represents a blend of digital collectibles and a symbolic representation of values associated with the current 

 token is positioned as a creative endeavor rather than an investment opportunity, distancing itself from political affiliations or campaign agendas.

In this article, we’ll explore U.S. President Trump’s pro-crypto promises and their broader implications for the industry, along with the launch of the TRUMP meme coin, its impact on the crypto market and how it’s performed, and lastly, the debut of Melania Trump’s meme coin, its tokenomics and its ripple effects on the broader meme coin market.

 during his 2024 campaign marked a shift for the crypto market. As the 47th U.S. president, his policies are expected to further influence regulatory frameworks and market sentiment in 2025 and beyond.

Trump's economic agenda, which emphasizes fiscal spending and tax cuts, may lead to inflationary pressures. Historically, this has increased Bitcoin's appeal as a hedge against inflation. Furthermore, his policies could strengthen the correlation between cryptocurrencies and traditional markets, potentially drawing institutional investors seeking diversification.

 meme coin on January 18 has sent shockwaves through the crypto market. Within two days, TRUMP reached an all-time high market capitalization of over $14.9 billion, capturing significant attention from various investors. This launch also fueled a surge in Solana’s ecosystem, with 

With the Trump brand backing it, TRUMP has become a symbol of both speculative excitement and broader crypto adoption.

 unveiled her very own token, MELANIA, with a post on X on January 20, stating: 

"The official Melania meme is live. You can buy $melania now," 

Following the launch, MELANIA’s price skyrocketed, reaching a high of over $13.70 and achieving a fully diluted market capitalization of $2 billion. The meme coin, launched on the Solana blockchain, mirrors her husband’s approach, relying on community engagement and interest to derive value. This launch has cemented Melania Trump’s entry into the crypto meme market, drawing attention from traders and meme enthusiasts alike and further expanding the Solana ecosystem’s reach.

The MELANIA token follows a structured distribution model, with 35% allocated to the team, 20% each to the treasury and community, 15% to the public and 10% to liquidity. The team’s tokens are subject to a 13-month vesting schedule, ensuring sustained commitment. An initial lock period spans the first 30 days, followed by a 10% unlock (3% of total supply). The remaining 90% vests linearly over the next 12 months, releasing approximately 2.25% of the total supply monthly.

This gradual release balances market stability while incentivizing the team to align with the project’s long-term success.

The launch of Melania Trump’s MELANIA meme coin has disrupted the market for her husband’s TRUMP token. After reaching a peak valuation of $15 billion, the TRUMP meme coin experienced a sharp decline, 

. Its price dropped from $74.60 to $45.90 within 40 minutes, wiping out $5 billion in market capitalization.

The timing of Melania’s token launch, just a day before Donald Trump’s presidential inauguration, further fueled market volatility. While Melania’s token quickly reached a $6 billion market cap, with over 45,000 wallets holding the coin, the shift caused significant turbulence for TRUMP holders.

Blockchain analysts suggest that MELANIA’s less professional handling compared to TRUMP’s token has added to the controversy, raising questions about its distribution and security. Despite the disruption, the launch has ignited widespread interest in politically themed meme coins, cementing their role in this phase we’re in.

Will MELANIA Signal a Paradigm Shift in the U.S.? 

The launch of Melania Trump’s MELANIA meme coin has sparked significant interest and controversy within the crypto community. From its rapid rise to a $2 billion market cap to the ripple effects on Donald Trump’s TRUMP token, the emergence of these politically themed meme coins has highlighted the volatile yet captivating nature of the market.

While the MELANIA token’s structured tokenomics suggest a long-term vision, concerns about its execution and distribution have raised questions. As with any investment, it’s crucial to 

 and understand the associated risks before engaging with any of these tokens.

This new chapter of meme coins underscores the dynamic intersection of politics and cryptocurrencies, marking a transformative moment for the industry. Whether MELANIA will sustain its momentum or fade into obscurity remains a question for the community and market to decide.

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Melania Meme (MELANIA): Melania Trump Launches New Meme Coin Following TRUMP

Official Trump (TRUMP) is a Solana-based meme coin launched by U.S. president Donald Trump that celebrates "winning" and community support. Learn more here.

 as the 47th U.S. president, Donald J. Trump demonstrated his pro-crypto stance by launching the Official Trump (TRUMP) cryptocurrency. The 

 has attracted unprecedented mainstream attention, with trading volume exceeding $36 billion in 24 hours.

This article explores how TRUMP works, its unique tokenomics and its market performance. We'll examine its trading mechanics, analyze its potential risks and opportunities and provide key insights for traders interested in this new digital asset.

-based meme cryptocurrency officially launched by U.S. president Donald J. Trump in January 2025. The project is designed to celebrate “winning” and unite Trump’s supporters in the digital asset space.

Official Trump operates on the Solana blockchain, chosen for its high speed and low transaction costs. The project's structure involves two key entities: CIC Digital LLC and Fight Fight Fight LLC, which together control 80% of the total token supply through a three-year vesting schedule.

The token was launched through an official announcement on Truth Social and X, positioning it as a celebration of "winning" and community engagement. The project prominently features the slogan "Fight, Fight, Fight" to emphasize unity among supporters.

The functionality of Official Trump is primarily based on trading and community engagement, with its website explicitly stating that it's "not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type."

TRUMP launched with an initial supply of 200 million tokens, adopting a structured distribution model that will expand to 1 billion tokens over three years. The token allocation follows a carefully designed framework. The initial distribution allocates 10% to liquidity pools to ensure smooth trading operations, while another 10% is available for public trading. The remaining 80% is strategically held by CIC Digital LLC and Fight Fight Fight LLC, released through a linear unlock schedule with daily emissions.

This controlled release mechanism includes specific lockup periods ranging from three to 12 months for different token groups, coupled with a 24-month unlock duration to maintain market stability.

Official Trump's market debut is the fastest-growing token launch in cryptocurrency history. Starting from less than $10, TRUMP skyrocketed to over $73, pushing its market capitalization past $75 billion and capturing traders' attention worldwide.

The token generated extraordinary market activity with over $36 billion in 24-hour trading volume. While TRUMP experienced some volatility following the launch of First Lady Melania Trump's MELANIA token, it maintained strong trading interest and significant market presence.

It reached an all-time high of $73.43 on Jan 19, 2025, and has since declined to about $34.31 (as of Jan 21, 2025).

Looking to trade TRUMP tokens? Bybit offers the TRUMP/USDT Spot trading pair for trading. To get started, you’ll need to first create a Bybit account, fund it with cryptocurrency and navigate to the 

 for traders interested in leveraged positions and long/short opportunities in the TRUMP market. This gives traders flexibility in their approach to trading the TRUMP token.

The launch of TRUMP marks a historic moment as the first cryptocurrency officially launched by a sitting U.S. president. With pro-crypto policies expected throughout his presidency and strong support from industry leaders, those bullish on TRUMP believe it will become a flagship token in cryptocurrency markets.

It’s clear that as millions of supporters enter the crypto market and trading volumes surge, TRUMP's potential impact extends beyond typical meme tokens. However, investors must carefully consider its unique characteristics and risk factors before making investment decisions.

TRUMP positions itself uniquely at the intersection of cryptocurrency and political influence, with continued relevance throughout the presidential term. However, investors should 

, particularly given the volatile nature of meme tokens and the evolving regulatory environment.

Official Trump introduces a new dynamic to cryptocurrency markets as the first crypto project launched by a sitting U.S. president. While initial trading activity shows strong market interest, investors may want to consider token emission schedules, market volatility and the ownership structure.

Unlike typical meme coins, TRUMP is a unique asset that traders should monitor through multiple lenses. While we don't know what Donald Trump has planned for his token, the price will likely be influenced by broader cryptocurrency market trends and ongoing political developments, with periods of high volatility throughout his presidency.

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Official Trump (TRUMP): The Meme Coin Sparking Political Buzz

DeFi

Decentralized exchanges are being touted as the 'next big thing' in the DeFi space. Read all about how they work here.

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 makes it possible to exchange assets of value on a peer-to-peer basis without relying on any centralized entity to govern the transaction. But when it comes to purchasing and exchanging crypto assets, users still tend to favor centralized platforms.

Decentralized exchanges (DEXs) are, however, gaining in popularity. Yet, just like anything else, DEXs have their pros and cons. In this article, we will talk about DEXs and compare them to their centralized alternatives. Let’s first, though, look at decentralized finance (

Traditional financial institutions imply control of a single, central source. DeFi stands for “decentralized finance,” a collective term for various financial applications, products and services that don’t need intermediaries like banks, credit units or insurance funds. 

While all these intermediaries were indeed useful in the past, helping different parties conduct deals and providing the security of their funds, the traditional systems of finance have lost the trust of the public over time — for various reasons. 

DeFi systems, on the contrary, do not need the superstructure of third parties because they are automated and run on the blockchain. Thanks to 

, it’s become possible to set up agreements that are fulfilled automatically. This means cheaper transfers, low-cost transactions and investments, and more efficient access to the funds for all participants. 

, as the whole crypto ecosystem would not be possible without decentralized means of payment. With the growth of interest in the field, the number of tradable coins and tokens increases as well, having started with 

Not every project can handle the fees imposed by centralized exchanges to provide their users with easy access to their native tokens. As a result, the demand for decentralized exchanges has grown as well.

Decentralized exchanges (or DEXs) are cryptocurrency exchanges that don’t require the services of third parties for operations with crypto assets. Thus, they allow traders to conduct deals directly with each other. Their functions are similar to those of traditional centralized platforms, but in contrast to them, DEXs provide a direct peer-to-peer trading mechanism based on smart contract execution.

Such a type of trading presupposes that all the participants in the deal keep control over their digital assets and private keys, with no necessity to pass them to any intermediary or custodian. In other words, DEXs function as platforms for users to search for matches on their buy and sell orders, without a central authority responsible for asset storage and swapping.

As the idea of creating such platforms was put to practice in 2013–2014, it isn’t easy to define which platform became the pioneer in this field, since different resources give different names. 

Today, numerous decentralized exchanges with different functions can be easily found on the web. GitHub alone lists over 250 fully operational DEXs at the time of writing. The most popular examples include 

, Compound, Curve Finance, 1inch Exchange and PancakeSwap.

It’s worth mentioning, though, that in reality, many online exchanges calling themselves decentralized are not absolutely decentralized. They use their own servers to store the trading data, though they don’t have access to users’ private keys.

DEXs perform similarly to their centralized counterparts in some ways but are different in others. There are several types of DEXs available to users, but the main feature that is common to all of them is that orders are executed on-chain. Some DEXs offer cross-chain token sales (e.g., AnySwap), but usually they are focused on a single blockchain (e.g., 

 or Binance Chain). There can be three differentiated basic categories of DEXs: on-chain order books, off-chain order books, and automated market makers. 

 implies that each order and each transaction is recorded on the blockchain. This requires lots of network nodes and hence seems rather impractical, as operations often cannot be performed in real time.

As for off-chain order books, such DEXs cannot be called entirely decentralized as records of transactions are carried out of blockchain, which may require the third party to be involved. Some specialists call such exchanges hybrid, since they combine the functions of centralized and decentralized exchanges.

These are protocols that provide liquidity to specific markets through automated algorithmic trading. This model doesn’t require any order book.

In fact, most DEX servers still host order books, but they don’t keep private keys. 

The purposes of decentralized and centralized exchanges are the same: they give access to high-quality financial tools and services for any person who requires them (and has a connection to the internet). The main difference between them is in the form of management.

The centralized exchanges are managed by a definite organization or individual who is responsible for the protection of the users’ personal data and funds. These entities have absolute control over the exchange and make decisions on the exchange’s functions and development themselves.

The decentralized platforms are managed in an automated manner, and their participants are often involved in the process of decision-making. These exchanges provide the technical possibility for the direct interaction of the participants and voting for or against important proposals.

Currently, a centralized model is dominant. As has already been mentioned above, the number of decentralized exchanges is over 250, while the number of their centralized counterparts exceeds several thousand. 

 reports that by the end of 2020, only 19% of all trading platforms are decentralized, while trading volumes provided by these platforms make up around 1%. DEXs are still in the early development stage, but they undoubtedly implement an innovative concept that is demanded by cryptocurrency markets.

No doubt, DEXs have been a breath of fresh air to the world of online exchanges, but they have both advantages and disadvantages. 

Most of such platforms’ strong points result from their distributed architecture and the absence of a single management center. Here are some of the key advantages that they provide:

Decentralized exchanges provide complete anonymity for their users. In the majority of cases, they don’t require any form of sign-up process. That is why no personal data is collected. Investors don’t have to pass KYC and AML compliance procedures or other identity checks. 

There are some legal requirements that cannot be neglected by central authorities, but they don’t work in the case of a truly decentralized platform. Of course, the legislative system will adapt to this kind of exchange with time, but now, thanks to DEXs, it is possible to trade in a completely anonymous manner.

Perhaps the biggest problem with centralized exchanges is the risk of being hacked, as the central storage of users’ funds turns into a honeypot for any attacker that manages to get through. The news about hacking attacks on popular platforms shows up in the media regularly, despite all the security measures put in place.

This results from the custodial nature of centralized exchanges, which means that they hold their investors’ assets themselves. Decentralized exchanges, on the other hand, are noncustodial. They allow users to integrate directly with their wallets. There is no single access point to all the assets and users’ data. This makes hacking more difficult and less profitable because an attacker would have to break into every individual account, instead of stealing from a central hub.

DEXs have no access to users’ funds, which not only lowers the risks of hacking attacks, but also lessens interference from the third parties, either from the management of the exchange or the local authorities. The funds will not be frozen, the withdrawals will not be delayed or denied, and the exchange will not be blocked by legislative authorities.

The absence of third parties makes the transactions much cheaper, compared to their centralized counterparts. While centralized exchanges usually impose taker and maker fees, with DEXs users only have to pay a network fee.

Thus, decentralized exchanges provide users with a much cheaper and safer solution, compared to their centralized alternatives. However, there is another side of the coin as well (so to speak). What about the downsides?

The same peculiarities of the decentralized exchanges’ architecture and full users’ control that result in the advantages mentioned above lead to a number of disadvantages and problems.

Many trading options such as stop losses, margin trading, technical analysis tools and lending are not available on the most decentralized exchanges. To begin trading, it is necessary to become familiar with browser extensions and smart contracts — and the interfaces are often not user-friendly. Decentralized platforms rarely support fiat currencies, and the process of depositing funds may turn out to be rather confusing and complicated.

Decentralized exchanges struggle with liquidity. They support diverse trading pairs, while the number of users is much lower. Their liquidity mainly depends on the number of participants actively trading on the platform, which makes things more complicated since centralized exchanges remain more popular these days.

The distribution of blockchain nodes means low throughput. Centralized platforms demonstrate higher indices because they have centralized servers. That is why the average order execution of centralized cryptocurrency exchanges is much faster. Slower performance on DEXs may lead to so-called “price slippage” when a transaction cannot be executed, due to changes in the prices of the cryptocurrencies that are swapped.

DEXs don’t have customer support that is able to influence the transactions or the users’ accounts. If anything goes amiss, users will have nob one to assist them.

Despite these obstacles, DEXs are still much more reliable and safer when compared to centralized platforms. Moreover, they are a much better fit for experienced users who understand the risks and are ready to take responsibility for their activities there.

The rapid growth of decentralized exchanges has turned out to be a challenge for market regulators, and has raised new legal issues. The status of DEXs is ambiguous because some of their features, like anonymity, contradict some requirements of  applicable legislation.

Different countries try to solve this problem in different ways. The US makes efforts to apply the existing legal basis, while the authorities of Singapore strive to create a new regulatory system for such exchanges. Nonetheless, there is no unequivocal position on DEXs in these countries, while  still others don’t regulate such platforms at all.

One of the main difficulties connected with the regulation of decentralized exchanges is that in most cases, they are not controlled by a definite legal entity or person. This leads to problems with the definition of a responsible person if violations are found. There can be considerable difficulties with regard to the regulation, per se, of trading activities. That is why it is impossible to apply measures and rules to them that are applicable to centralized exchanges.

DEXs resolve most of the issues that centralized platforms struggle with, as they provide users with a much more secure solution to exchange their funds. The recent introduction of Uniswap technology has made it possible to quickly switch ERC-20 tokens, and has pushed the use of decentralized exchanges to new heights.

However, their popularity is still way lower while the legalization questions remain unsolved. DEXs definitely have lots of potential, but they still have a long way to go before they go mainstream.

What Are Decentralized Exchanges (DEXs) and How Do They Work?

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