Centralised exchanges (CEX) are designed to hold cryptocurrencies in centralised reserves- which, by the way, goes against the decentralised nature of blockchain systems- and can result in large scale losses, as we see in the recent cryptopia exchange hack as well as canadian crypto exchange QuadrigaCx, whose CEO died holding the keys to $190M worth of digital assets.
DEX (decentralised exchanges) on the other hand, allow users to manage their private keys. This means DEX have limited vulnerability to large scale hacks, compared to CEX counterparts. However, DEX are not so common, and indeed for obvious reasons, such as the complex coding work required to build them.
Talking about DEX, Changpeng Zhao, founder of the world's largest crypto trading platform- Binance, announced plans to launch Binance DEX testnet in a tweet February 12, 2019. Earlier in august last year, a sneak peek of the proposed DEX was offered to the public.
Speculation over the actual launch date received answers February 7 2019, during an AMA session with CZ. Responding to a question, he, CZ said "very soon we will open the beta, in about a week or so, I would guess, but again, don't quote me on that"
In a similar trend, a new crypto project with a DEX exchange, which offers support for erc20 tokens, has emerged in Africa. The parent company, AfroDex Labs, has come under the radar for its large supply of 1 quadrillion tokens.
When the project's telegram community asked the reason for the huge supply, Emmanuel Adams, the project's founder, said long and hard consultations were made before deciding on the supply. Furthermore, he assured the community that the issue is thoroughly addressed in the FAQ section of the project's website, also noting that AfroDex Labs has 10 broad product categories including AfroPay, AfroVault and AfroDex. Finally, he stated that AfroDex Labs is focused on making AFDLT tokens useful for transactional purposes, not merely speculative functions.
Centralised exchanges are very popular today, and most traders still use them, despite the threats from hackers and exit scams. However, in the future, it appears that DEX will be the drivers of the exchange market, as more people will opt for SAFU platforms, where they would have control over their own private keys, as will indeed be possible on DEX.
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