Explained | Crypto exchanges: Centralised, decentralised, or hybrid; where to trade?

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Cryptocurrency trading is gaining steam, and almost everyone is eager to jump on the bandwagon. But before dipping your toes in the complex world of crypto trading, it is crucial to keep a few things in mind.

For instance, it is important to choose the right crypto exchange that suits all your needs in terms of ease of operation, transaction fees, etc.Like stock exchanges, crypto traders can buy, sell, and convert cryptocurrencies on crypto exchanges. There are currently three types of cryptocurrency exchanges—centralised exchanges (CEXs), decentralised exchanges (DEX) and hybrid exchanges (HEX).While most trading currently happens on CEXs such as WazirX, Binance, Coinbase, among others, the rise of decentralised finance (DeFi) and related applications (dApps) on blockchains like Ethereum has fuelled the development of DEXs.

Some popular DEXs like Uniswap, Pancakeswap, and Compound also witness massive transaction volumes.Also read: Crypto adoption trends: From adoption of Web 3.0 to DeFi 2.0, here's what to expect in 2022HEXs have been designed to overcome limitations in CEXs and DEXs and are still in their infancy. They aim to combine the best features of both CEX and DEX.

Qurrex, Eidoo, and Legalos are some of the hybrid exchanges.Let’s look at key differences between these exchanges.What are centralised exchanges?Centralised exchanges are the most common types of cryptocurrency exchanges and usually have the simple processes and smooth interface. A central entity governs them, typically the owner of the exchange.

In CEX, every order is recorded and validated by the company to ensure security and correctness. These exchanges usually offer both crypto-to-crypto trading and use of funds via your bank account or credit