How Smart Crypto Platforms Are Merging CEX + DEX to Empower Traders

Centralized and Decentralized Exchange platforms are both used to trade cryptocurrencies, but they differ significantly in how they operate and the control they offer to users. We will provide you with a brief overview of both exchange platforms, and then we will delve deeper into how the merger of these two has created intelligent crypto platforms like BYDFi to empower traders.

You can think about CEX just like traditional stock exchanges, where you have a centralized intermediary to monitor and facilitate crypto asset trading. These exchanges use their own order books where all cryptocurrency transactions are recorded and authenticated, and require KYC as well as anti-money laundering checks.

On the other hand, DEX is more privacy-centric and safe as it directly connects buyers and sellers. It is based on blockchain technology and operates without intermediaries. Anyone can use this exchange for crypto trading without revealing their private information, which means it does not require Know Your Customer (KYC) or anti-money laundering checks.

Now, when it comes to the merger of these two well-known and highly reputable exchanges, BYDFi is the platform that has facilitated the merger, offering access to a trading platform that is not only convenient but also innovative and professional. They have been offering the best smart money tracking tools, featuring options such as spot trading, perpetual contracts, spot investment, martingale, and spot/future grid trading to empower the traders.

The Known Challenges Between CEX and DEX Platforms

To better understand the emergence of two crypto platforms, it is essential to first discuss and explain the challenges between these platforms and their pros and cons.

Pros and Cons of Centralized Exchange (CEX)

Pros

User-friendly Interface: The UI is easy to understand and offers a thorough guide and helpful tutorials.
High Liquidity: Due to higher liquidity, the trades are done quicker, while trade prices mostly stay stable.
Easy Conversion Between Fiat and Crypto: You can easily convert crypto to fiat and fiat to crypto without any limitations.
Added Trading Features: Exchange is centralized, so you get greater options for investment and trading through features like futures, spot trading, and options.
Regulated: A fully regulated platform that helps people rely on it easily.

Cons

Lacks Privacy: It is mandatory to fill out KYC (Know Your Customer) to use this platform, which means it requires private information.
Less Control: Private keys are not in your control; they are stored within the platform, and the platform has all the control.
Limited Accessibility: Requires you to have government-issued identity documents and a bank account, and may not be suitable if you live in a sanctioned country.
Loss Due to Hacks: Your funds are stored in the wallets maintained by the centralized organization; if a hacking attempt happens, you might lose your funds.

Pros and Cons of Decentralized Exchange (DEX)

Pros

Access to Your Keys and Wallet: With full control over your wallet and the keys, no one will be able to gain access to your funds.
Censorship Resistant: Much harder to shut down or censor as it is based on Web3 and public infrastructure.
Accessible from Anywhere: If you have a wallet, then you can easily access it from anywhere. No bank account or identity document needed.
Reduced Security Risks: In the event of hacking, your funds will remain secure.
No Restrictions: No need to fill KYC, everyone has the freedom to trade crypto.

Cons

Trading Options Are Limited: Options are limited due to the fact that there is a lack of a required mechanism to evaluate assets.
Harder to Understand the Interface: Requires some time to learn, understand, and grasp how exactly DEX works.
Non-Intuitive UI: The UI is difficult to understand and lacks clear guidance.
Requires Crypto: No support for fiat currencies or bank accounts; it works only with crypto.

The Emergence of Smart Crypto Platforms

We have already discussed the pros and cons of the two major exchange platform types, but what if there were a platform that allowed us to enjoy the benefits of both in a single platform while minimizing the weaknesses found in each?

These platforms are referred to as hybrid or smart crypto platforms. One such platform is BYDFi, which has launched its own MoonX, an on-chain Web3 trading tool designed to serve the booming Memecoin market.

Many are unaware, but the CEX and DEX can be integrated into a single crypto platform exchange through hybrid exchanges and by integrating CEX-DEX. This merger enables users to enjoy the best of both platforms without compromising on the limitations.

Once CEX and DEX are merged, it will offer you all the positive characteristics of CEX while, at the same time, the security and anonymity of DEX will be available as well. And that is exactly how smart exchange is created to develop a more stable, secure, and reliable trading platform for the traders, while eliminating most of the limitations found in both platforms.

This fusion has helped bridge the gap between centralized exchanges (CEX) and decentralized exchanges (DEX), supporting the development of platforms like MoonX.

BYDFi MoonX Platform

When it comes to Crypto and Web3, BYDFi (BUIDL Your Dream Finance) is a well-known social trading platform, recognized as one of the best social trading platforms designed for individual traders. Since 2020, the brand has been offering professional and innovative trading solutions to millions of users around the world, which include spot investment, spot trading, perpetual contracts, martingale, and spot/future grid. This is what helps in taking crypto-based trading to the next level.

Talking about the fusion of CEX+DEX and the dual-engine era, which promises to offer the perfect blend of the efficiency of centralized and the freedom of decentralized exchange. The same brand has launched BYDFi MoonX, a Web3-based on-chain trading tool that supports both the BNB and Solana Chain ecosystems.

Benefits of BYDFi Hybrid Crypto Exchanges for Traders

A hybrid crypto exchange by BYDFi offers countless benefits for crypto traders as opposed to being dependent on a CEX-only or DEX-only platform. Let’s discuss some of the most notable ones.

Fast Token Listing: API data exchange with platforms like Pump.fun to capture hot projects as liquidity pools are launched, which exploits trading time differences.
Smart Risk Control: Multi-dimensional models evaluate token security, including contract permissions, blacklists, and token lock-up status, which helps filter out high-risk tokens.
Smart Money Following: The system has the capability to track millions of on-chain addresses, identifying whales and high-probability addresses, allowing users to copy trades with one click and easily share strategy profits.
Trade Optimization: Built-in gas optimization algorithms and slippage control mechanisms ensure smooth transactions and cost control, even during peak times.

Simplified User Experience

DEX is challenging to understand, especially for beginners, as it requires a deeper understanding of how blockchain technology works and how a wallet can be connected. That is where the simplified and enhanced user experience of a smart crypto exchange plays its role, as it completely eliminates the complexity.

The user experience is simplified while all the processes are neatly streamlined, and you get to use the user-friendly dashboard that looks just as simplified as the one available in the CEX platform. This all works synchronously and ultimately helps bring complex trading approaches to a broader audience in an easily accessible manner.

Enjoy Better Liquidity and Prices

Traders are primarily seeking better and simpler access to liquidity due to its greater advantages. When it comes to smart crypto platforms, they intelligently combine liquidity pools and order books from both centralized exchanges (CEX) and decentralized exchanges (DEX). This helps ensure that the trades are liquidated at the best possible prices.

This helps ensure you can maximize your total profitability without compromising or losing trades.

Lowered Trading Costs

Hybrid trading platforms have significantly lower trading costs as compared to the trade costs of traditional CEX and DEX platforms. DEX is where traders need to factor in blockchain network fees, which can sometimes be expensive. Whereas CEX has slightly lower trading fees, the addition of withdrawal and deposit fees makes the overall trade more expensive.

Concluding Thoughts

The fusion of two traditional platforms has seamlessly blended the strengths of both CEX and DEX, helping to shape the future of the crypto exchange. This combination offers better liquidity, a simplified user experience, enhanced security, and, above all, lower trading costs.

The smart crypto platforms have managed to overcome many limitations typically found in traditional exchanges. However, despite this merger, certain challenges remain, which are related to regulations, scalability, and adoption by the traders and crypto community.