Decentralized trading is the exchange of crypto-assets directly between parties through smart contracts on a blockchain, without a centralized intermediary holding custody of funds or matching orders. Trades settle peer-to-contract against liquidity pools or order books governed by deterministic on-chain logic, giving traders self-custody and permissionless access. It is the activity layer enabled by decentralized exchanges and automated market makers.
Content
- Trades execute against liquidity pools (AMMs) or on-chain order books, settling atomically with self-custody throughout. Trade-offs include slippage, miner/validator extractable value (MEV), and gas costs, balanced against censorship resistance and the absence of counterparty custody risk.