The other side of the coin in the world of cryptocurrency exchanges is decentralized exchanges. A DeFi exchange differs from a centralized (CeFi) one as they record all transactions directly onto the blockchain. As blockchain acts as an ongoing ledger that is unable to be altered and is public, this provides complete visibility over the entire process.

People are beginning to favor decentralized exchanges because they are the ones that are in charge of their own funds. Instead of being stored within a centralized platform, users’ crypto assets can be tracked on an immutable ledger. And users have private keys that permit them to access their cryptocurrencies any time they want.

Considering recent events, this system is much more secure for users, in general. If FTX was a decentralized exchange, all users would know where their funds are, with the platform being unable to move or manipulate user accounts. Without any ownership of user funds, a decentralized exchange cannot tamper with wallets, as we saw with FTX sending crypto to Alameda Research.