Crypto Academy Week 11: Homework Post for @yousafharoonkhan | Decentralized and Centralized Exchanges, How to use uniswap, best Cryptocurrency Exchanges of 2021
It's another great week to learn at the academy. The journey has been smooth since resumption and this time, I read the lecture from professor @yousafharoonkhan and I will be solving the task given by the professor in this article.
Decentralized and Centralized Exchanges
Decentralized Exchange: Decentralized exchange is the type of an exchange whereby users can directly interact with the exchange to complete buy/sell, swap/exchange, provide liquidity without the involvement of third parties in the transactions rather users transacts independently while Centralized Exchange is the type of an exchange whereby traders carry out buy/sell on the exchange with the involvement of third parties in buy/sell transaction. Traders/investors creates order books on centralized exchange for every buy/sell transaction initiated which is completed between the buyer and seller by the exchange that serve as the third party in the transaction.
Differences between Decentralized and Centralized Exchanges
| Decentralized Exchange | Centralized Exchange |
|---|---|
| There is no involvement of third parties in transactions | There is involvement of third parties in transactions |
| Transaction fee is very low on decentralized exchange. Yes, transaction fee exist though infinitesimal | Transaction fee is higher on centralized exchange than the counterpart decentralized exchange |
| There is no trading options of spot, margin and futures trading | There is trading options of spot, margin and futures trading |
| Users don't have to go through KYC verification before using it | To effectively utilize the features of Centralized exchange, users have to pass through the KYC verification |
| Independence of transaction on decentralized exchange | Transactions on centralized exchange pass through orders as allowed by the exchange rules of operation |
| Quick buy/sell without any delay even with small balance | Purchase or sell on Centralized exchange are sometimes hindered due to low balance |
2 Best Centralized Exchanges of 2021
.jpeg)
1. Binance: Binance exchange is a great centralized exchange that came into limelight in the year 2017 and has since been so relevant. The Binance exchange has the native cryptocurrency known as Binance Coin (BNB) which was created in July, 2017. I started trading with Binance exchange and it's predominantly my favourite up till now, Binance exchange is known for its low transaction fee of just 0.1% on all successful sell/buy orders carried out and this fee is often paid using the native Binance Coin (BNB) if you have it in your wallet with up to 25% reduction of the transaction fee. I specially choose Binance because of its easy interface that facilitates effectively trading and the low transaction fees.
My verified account on Binance exchange
My recent transaction on Binance exchange- TRX/USDT pair
2. Coinbase: Coinbase exchange is a long existing centralized exchange for cryptocurrency since the year 2012 and has remained solid up till date. In addition to its centralized exchanges service rendered, Coinbase has Coinbase wallet which is a custodial crypto wallet that is built on decentralization and this allows their users to navigate between two systems and utilize the best one for any of the choice transaction at a particular point in time. Coinbase charges around 0.99 - 2.99 USD depending on the type and volume of transaction carried out. Coinbase has its licence of operation in almost 40 US states and other territories, and this strengthens their reputation. And I choose Coinbase for its many years of integrity and holding up to offer several services which even incorporates decentralized realm as seen in the Coinbase Wallet.
Metamask Installation
For this process of installation of Metamask, I will be using Uniswap for my installation and the steps will be given below.
Step 1
- Visit app.uniswap.org
- Click on Connect wallet.
- Select Install Metamask.
- Hit Download Now.
- Select Chrome among the devices.
- Click Install Metamask for Chrome.
Connect Wallet
Install Metamask
Download Now
Download Metamask For Chrome
Step 2
- Click Add Metamask to Chrome.
- Add Extension.
- Click the Metamask icon extension to visit.
- Create wallet and agree to terms.
Add to Chrome
Add Extension
Metamask navigation
Create wallet
Agree terms
Step 3
- Create a very strong password of 8 characters min.
- Click "I have read the terms" and"Create".
- Now to backup phrase.
Create password
Reveal backup phrase
Step 4
- Backup phrase which is 12 words on Metamask should be written down securely where you only can have access to it.
- Confirm phrase by inserting it in order and click "Confirm".
Write down backup phrase
Confirm backup phrase
Step 5
- Wallet created and you get congratulations message. Click "All Done".
- Account ready.
- Click "Start Swapping".
All Done
Start Swapping
Swap Interface
The steps above ran through the process of installing the Metamask wallet through Uniswap.
Using Uniswap for Swapping
This question says we should explore Uniswap exchange to see how to carry out certain transactions and for this purpose, I will be using the Trust wallet (which is a web 3.0 wallet, that is, a wallet that uses web + AI) to connect with the Uniswap to show the process.
- I have Trust wallet on my phone already such that I don't have to download a new one.
- Launch the Trust Wallet.
- Go to DApp and Visit Uniswap DApp.
- Connect Wallet.
Trust Wallet- DApp
Swap Interface- Connect Wallet
- Uniswap will be connected with Trust Wallet.
- Select a Token you are swapping to.
Select a Token
- Now, I am swapping ETH to 1INCH
- Input the amount of ETH.
- And the equivalent 1INCH I would be getting will be shown.
- Click "Swap".
- It would be processed (provided you have sufficient balance) and drop to the destination wallet.
ETH-1INCH
Input amount
In conclusion, Decentralized exchange has its advantages likewise Centralized exchange and they both have their flaws. I am glad to be under this lecture that exposes more to me as it gave me the chance to research more about both exchanges. My regards to professor @yousafharoonkhan, thank you sir.
Written by; @fredquantum
First respected student Thank you very much for taking participate in Steemit Crypto Academy Season 2, Week 3 course class..
I have read your assignment very satisfactorily
you explained every detail very well , thank you very much for taking participate in the class
Grade : 8
Thank you professor, I'm glad to be part of your class.