The crypto user interfaces are the exchanges, the aggregators, and the lending platforms. As the Crypto Market grows, two kinds of exchanges have emerged – Centralized and Decentralized Exchanges.

Table 6 below summarises the differences between these two exchanges.

Centralized Exchanges

Centralized exchanges (Cex) are the first kind of exchanges that emerged in the Crypto Market; they originated with the birth of Bitcoin, the first crypto to be invented.

In a Cex, the buyer and the seller of the crypto meet to trade in cryptos or crypto-fiat currencies under the coordination of a third party, a central figure, who lays out the conditions for the transaction.

Normally, in a Cex, when you want to send, receive, buy or sell a crypto:

• The prices of the currencies are displayed in an Order Book in the exchange

• The Private Key of your wallet is held by the exchange, which means that when you want to withdraw your crypto, the exchange will have to sign the transaction on your behalf.

This means you will need to trust the exchange to do the right thing. But such right thing is sometimes not done.

Occasionally, front running occurs in centralized exchanges.

Front running is a practice in which an insider is aware of a pending transaction and uses that privileged information to place a trade before the transaction is processed. The front runner, therefore, benefits from information not known to the public.

Generally speaking, this is illegal.

Thus, trust has been a major challenge in Cex.

Decentralized Exchanges

Because of the problem of trust with Cex and with the birth of the Ethereum blockchain in 2015 with its innovative smart contracts, developers started to experiment with new ideas to produce new models for exchanges.

The stages of growth of these new models are as follows:

(a). Order Book on Blockchain

Instead of keeping the Order Book that contained the selling/buying price offers of users on the exchange, from 2016 some developers decided to build exchanges that would rather keep the Order Books on blockchains. By this action, no third party would be in charge of transactions.

Such a user-interface model in which the Order Book is kept on a blockchain is known as Semi-Decentralized Exchange.

Exchanges that utilized this model include Oasis and the 0x.

(b). Automated Market Makers

By 2018, a new idea to completely get rid of the Order Book was developed. That is, instead of providing an Order Book, a model was developed in which users were encouraged to supply their cryptos on blockchains so that anyone could easily transact with the cryptos.

To encourage users to keep their cryptos on the blockchain, the users receive a small percentage of profit from every transaction that involves their cryptos.

Such users who provide their cryptos for the transactions on the blockchain are called Liquidity Providers (LP).

With this method, there is no need to have any central party to supervise and interfere with transactions and no need for Order Books.

This user-interface model is known as Automated Market Makers (AMM). That is, it is automated and the Liquidity Providers are the makers (creators or producers) of the market.

AMM is a fully decentralized model that has two main benefits:

• it is trustless, that is, no more problems with trust

• it is permissionless, that is, does not require any KYC (know your customer) documentation or any other form of permission.

Exchanges that utilize the AMM model are Decentralized Exchanges (Dex).

Today, Dex that use the AMM model have multiplied to more than 200 (as at the writing of this manuscript).

Because transactions are carried out on the blockchain, a Dex reduces the risk of theft, prevents price manipulation or faked trading volume, and offers more anonymous transactions than Cex.

The popular Dex are Uniswap, Pancakeswap, and EdaFace Dex.

EdaFace Dex can be accessed here: dex.edaface.com.

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