South Korean cryptocurrency exchange giant Bithumb has announced plans to operate a decentralized exchange in the coming months.
Bithumb DEX will be launched outside of South Korea by an overseas subsidiary and is expected to target the global cryptocurrency market.
Centralized exchanges generate profit in the form of trading fees. Every time a trade is made the exchange charges a percentage. With a decentralized exchange, a service provider or mediator cannot exist, which limits a central party in processing trades. It is possible, however, to hardcode transaction fees into smart contracts so that each trade provides the development team incentive to sustain development.
Investing and making trades through a DEX (Decentralized Exchange) can be more complex than using a centralized exchange as there are no service providers to rely on when issues are potentially encountered.