Hello Everyone,

I deem it a great honor to participate in this homework task by Prof @yousafharoonkhan. The detailed lesson was very comprehensive.

Decentralized and Centralized Exchanges

Decentralized Exchange is a kind of exchange in which intermediaries or third parties are not involved. In this type of Exchange users involve interact with exchange directly to accomplish purchase/sell, swap and also provides free liquidity without intermediaries. This is possible because, this type of Exchange uses smart contract to facilitate its process. Uses have liberty to do whatever they wishes, no regulations regarding this type of Exchange.

Centralized Exchange: in this type of Exchange, intermediaries are involved in the buy/sell, swap and liquidity transactions between trader and issuers. In this type of Exchange, there ground rules and regulations that need to be followed before a successful exchange. This type of exchange provides high liquidity and volume of assets.

DIFERENCES BETWEEN DECNTRALIZED AND CENTRALIZED EXCHANGES

DECENTRALIZED EXCHANGE	CENTRALIZED EXCHANGE
No verification required before Exchanges	Users must be verified with the KYC system before getting access to Exchanges.
Users do transactions without intermediaries.	Intermediaries are involved in transactions
Users have their own private keys which give them access to Exchanges.	Users creates password but only authorities have access to private keys of the Exchanges.
Very technological but complex to operate.	Very simple and easy to operate.
Liquidity level is high due quick trading of exchanges.	Liquidity level in this exchange is less due to delay in trading.

Best Centralized Exchanges of 2021

1. Binance: it is great and very relevant centralized exchange that was founded in 2017 by changpeng Zhao. The Binance exchange comprises of a lot of coins including; BTC, ETH, steem, BNB, but the native coin for the Binance Exchange is Binance coin (BNB). I was introduced to this Exchange by a friend and ever since I have started using, what I like about it is the interface. It has a friendly-user interface in which you can switch to Binancee Lite for easy navigation. What makes this centralized exchange unique is its low transaction fee of 0.1% on a complete purchase or sell. Also when making deposit on Binance there are no fee charge except when making withdrawal.
   What I like most about this Exchange platform is the spot trade, just some few steps and you are done with your trade.

Below is a screenshot of my verified profile and a transaction made within 24 hours.

verified profile

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transaction made within 24 hours

1. Coinbase: the coinbase centralized exchange platform started operation since 2012 and since then has been a perfect platform for exchanges. The transaction fees for a successful trade is much high than that of Bnance and it ranges from 0.99 – 2.99 depending on the transaction and volume of transaction performed. Coinbase has a wallet called coinbase wallet which allow user to store their assets. This coinbase wallet is decentralized base which makes the Coinbase Exchange platform both centralized and decentralized.

Metamask Installation

First, I will give the steps in creating and downloading metamask and also adding its extension to google chrome.

Secondly, I show step by step screenshots on all the processes explained.

• Visit app.uniswap.org

• You need to connect to your wallet so select and click on connect wallet.

• Select and click on Install Metamask.

• Click on download.

• Choose chrome among the other devices.

• Click Install metamask for chrome.

• Add Metamask to Chrome.

• Add Metamask Extension

• Create a wallet and follow to proceed.

We are done with the first part, so we now start with creating:

• You need to create a very strong password ranging from eight characters.

• Accept the terms and conditions and click on “Create”.

• All you need to do now is to save your backup phrase. This is a secrete phrase so should be hidden from others.

• A window will pop up to confirm your backup phrase.

• You have your wallet created, so now click on “All done” to proceed.

• Finally click on “Start Swapping”.

Below are the screenshots.

This displays the interface of how to swap

How to Swap/Buy or Swap/Sell any coin using Uniswap

Uniswap can be used to swap any coin and below are the steps to follow when swapping a coin for another. In this steps I am swapping from ETH to DAI

• You need to select the coin you wish to swap or buy from. Eg, I am swapping from ETH

• You then select the coin you wish to swap to. I chose to swap to DAI.

• Your swap or purchase is done so you proceed to click on review. Clicking on review shows the equivalent amount you will get in your purchase.

This shows the number of DAI I will be getting if I am to swap with 0.07 worth of ETH

CONCLUSION

Selecting an Exchange platform depends on the investor and so one needs to make enquiries before. To me I will recommend Binance since it’s lesser in charges and also has a user-friendly interface.

Thanks For Your Attention