Decentralized peer-to-peer (P2P) exchanges are a rising trend in the world of cryptocurrency, offering a decentralized platform for users to trade directly with one another rather than through a centralized entity. In markets such as Africa, where access to traditional financial institutions may be limited, the benefits of decentralised P2P exchanges are particularly pronounced.
These exchanges offer several advantages over centralized exchanges.
- Decentralized P2P exchanges are more resistant to censorship, as they are not controlled by any single entity and are therefore less vulnerable to interference by external parties.
- They offer greater privacy for users, as they do not need to reveal their personal information to trade.
- Saves users time and money as they can avoid fees associated with transferring funds between centralised exchanges and non-custodial wallets.
- They offer greater security, as the trade happens on-chain without any centralised entity and are therefore less vulnerable to hacks and other security breaches.
- Decentralized P2P exchanges give users greater control over their trades, as they can negotiate fiat payment methods of their trades directly with one another.
To start using Decentralised P2P exchanges you will need to:
- Pick a blockchain platform: The first step to using DeFi is selecting a platform that offers the services you are interested in. Eg Ethereum, Binance Smart Chain, and Polygon.
- Setup a wallet: To interact with Decentralised P2P exchanges and other DeFi protocols, you will need a wallet that is compatible with your chosen platform. There are many wallet options available, including MetaMask, Trust Wallet, and Coinbase Wallet.
- Deposit funds: Once you have a wallet set up connect it to a decentralised exchange. Choose the token you want, and the exchange will connect you with a seller. Send fiat to the seller in exchange for the token.
- Withdrawal funds: To withdraw tokens for fiat currency, go to a decentralised exchange and deposit your tokens into an on-chain escrow contract. The platform will then connect you with buyers interested in swapping the token for fiat currency.
As the use of cryptocurrencies continues to grow in Africa and beyond, it is likely that decentralised P2P exchanges will play an increasingly important role in the ecosystem. There are many of these available including localcryptos and our newly deployed decentralised p2p exchange coinramp network (coinramp.network). Check it out 😉
Source : Polygon Medium