What Are the Primary Differences between Centralized and Decentralized Options Trading Platforms?
Centralized platforms (CEXs) act as intermediaries, holding custody of assets and guaranteeing contract fulfillment through their own clearinghouse. They offer high speed and familiar order-book trading.
Decentralized platforms (DEXs) are non-custodial, executing contracts via smart contracts on a blockchain, often using AMMs or peer-to-pool models. DEXs offer greater transparency and censorship resistance but may have higher gas costs and lower execution speed.
Glossar
Decentralized Platforms
Architecture ⎊ ⎊ Decentralized platforms, within the context of cryptocurrency and derivatives, represent a fundamental shift from centralized intermediaries to peer-to-peer systems leveraging distributed ledger technology.
Censorship Resistance
Immutability ⎊ The core of this property is the cryptographic linking of data structures, making retroactive alteration of validated transactions computationally infeasible.
Decentralized Options Trading
Execution Venue ⎊ Decentralized Options Trading refers to the deployment of smart contracts on a blockchain to facilitate the creation, trading, and settlement of options contracts without reliance on centralized custodians or traditional clearinghouses.