The end of CEX: using crypto without a centralized exchange
The FTX scam has raised reliability concerns for centralized marketplaces.
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Proof of Reserves audits are a forced step to rebuild users' trust in centralized exchanges. However, crypto outflows from centralized exchanges continue, with many people wondering, “How to use crypto without CEXs (Centralized Exchanges)?”
We decided to prepare a guide on how to trade crypto without centralized exchanges. But first, let’s determine the key features of the CEX:
● Exchanging cryptocurrency for fiat money and vice versa;
● Trading operations;
● All types of orders – Market, Limit, Stop-Limit, Take Profit;
● Margin and futures trading;
● Ability to use the mobile app;
● Cryptocurrency storage, transferring different coins within different networks;
● Passive income opportunities: farming, staking, deposits, and crypto lending.
Let's analyze each point to understand how they can be replaced.
Deposit and withdrawal of fiat
The most significant advantage of the CEX is the ability to deposit national currencies using debit and credit cards, which is done through fiat gateways. It almost always requires KYC.
But crypto has been around for a long time, so everything can be done without KYC. The easiest way is to use online and offline exchangers. The first can be found on specialized platforms, and the second – in any major city.
There are also some P2P exchanges with no KYC requirements, one of which is Bitcoin Global. Here you can buy and sell USDT, BTC, and ETH at the market rate and immediately withdraw to your wallet or card in fiat.
Bitcoin Global web interface
Token swaps, trading orders
DEXs (Decentralized Exchanges) are the best option for decentralized token swaps. You need to have crypto in your wallet and a coin of the selected blockchain to pay fees. Then go to any DEX and swap one token for another.
The main challenge here is not to get caught in scams and use reliable platforms. Therefore, it is better to follow links from Coingecko and Coinmarketcap websites. The DEX section contains all the reliable and most liquid exchanges. But don’t scroll too long – 50th+ positions rank exchanges with low ratings and insufficient information.
Recently, more and more tools for decentralized trading have become available, including trading orders. Pancake Swap, 1inch, Raydium, Uniswap, SushiSwap – many platforms allow users to place Limit and Stop orders for different tokens. And Layer 2 solutions like ImmutableX, StarkNet, and others allow you to level the problem of Ethereum's high gas fees.
Limit order on 1inch
Margin and futures trading
Although the local futures do not have such a variety of tokens as on centralized exchanges, it offers the leading cryptocurrencies with sufficient trading volumes. Some DEXs allow traders to use leverage. These platforms include dYdX, Tulip (Solana), Alpaca Finance (BSC), and others. See more on Coingecko and Coinmarketcap in the Derivatives section.
Futures DEX terminal dYdX
Mobile apps
A few decentralized platforms have mobile applications. It is due to the complexity of linking the DEX smart contract to the wallet keys.
But this issue can be resolved with the help of mobile crypto wallets. Each platform has a Browser section where you can find the necessary platform and connect to it to perform operations.
Crypto storage and transfers between networks
Storing tokens shouldn't be a problem. There are many multicurrency wallets like Trust, Exodus, Metamask, Coin98, and vaults for individual blockchains. If you need to store coins for a long time, you may use Ledger or Trezor cold wallets.
Some users need to transfer tokens between different networks. In this case, they may use cross-chain bridges that allow moving tokens of different standards to blockchains of another network. Previously, GNcrypto extensively covered these platforms here. The most popular cross-chain bridges are AllBridge, Cbridge, Ren, and Thorchain.
The working terminal of the AllBridge cross-chain bridge
Staking, farming, crypto lending
Most of these functions on centralized exchanges are implemented through partnerships with decentralized exchanges. So the user, on the contrary, will use the desired product directly, without an intermediary.
Staking of different cryptocurrencies is available through official validators on most wallets. You can also stake coins on project websites. Liquidity farming and various investment products are available on all DEX exchanges. The main thing is to properly diversify funds between platforms so as not to become a victim of a hacker attack and money theft.
Crypto lending is an excellent way to borrow crypto against another crypto or lend out your coins. You may use AAVE, Compound, Kava, Venus, and other platforms for this purpose, which are listed on the analytical platforms Coingecko and Coinmarketcap under the Lending tag.
The working interface of the Compound credit protocol
There is every opportunity not to use centralized exchanges and not to store all your funds on them. Now the main task is precisely to raise the level of traders' awareness so that they can freely take the advantage of DeFi with minimal risk.
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