The AXL project provides a truly decentralized system of operation to our users around the world. A truly decentralized model will have various benefits that will be enjoyed as opposed to running a centralized system. What notable differences can be found between a centralized and decentralized model of operation?
A centralized exchange is a third-party exchange that acts as a facilitator for transactions carried out between two parties on its platform. It actually improves trading convenience because all activities are properly managed and controlled, thus loss of funds during a transaction is minimal. Before a trade is initiated, the funds are held in an account before execution.
A decentralized exchange, on the other hand, does not have a designated authority in charge. There is no single account that holds funds before market orders are executed. Rather, the platform itself acts as a mediator for matching orders directly on a peer-to-peer basis. Transactions are not kept in charge of a third-party server and escrow costs and charges are eliminated.
