2023-05-30 13:27:57
Ignoring regulation
On Yavin explains about intermediaries and stock exchanges
Not all exchanges are the same
Now you can move to the next stage, and realize that not all exchanges active in the field of the token economy are the same. This is a mistake of entrepreneurs in the field, who treat all exchanges as the same thing and we will explain what is more correct. The crypto economy can actually be run in two main types of exchanges. One type of stock exchange is called a centralized stock exchange. Another type of stock market is called a decentralized stock market.
A centralized exchange may be expected to be a part of the token economy and decentralized finance, but in fact it operates more like a normal bank in all respects. A centralized stock exchange manages a set of records, which are distinctly similar to the records maintained by banks, insurance companies and other veterans of the centralized financial system. Decentralized exchanges work differently, by a mechanism of market makers. That is, the current market value is determined by automatic protocols based on mathematical algorithms in order to quote a price for a token or currency at a given moment.
It is important to note that not all exchanges are the same in the way they deal with possible market manipulations. What entrepreneurs don’t always take into account, is that decentralized exchanges are more expensive, but that doesn’t mean they are less profitable. Even the fact that the centralized exchanges manage much more capital in terms of market capitalization does not mean that they are automatically the preferred choice.
Mistakes of entrepreneurs in decentralized loans
Another thing that is important to understand in the toucan economy is that it is possible to borrow or borrow in this ecosystem, but several things must be taken into account. For example, currencies and tokens used as collateral are still characterized by a high level of volatility. It is necessary to provide collateral, but given certain conditions, the loan may meet the need for immediate repayment. That is, if the value of the collateral falls below a certain threshold, there may be an immediate demand for repayment or the injection of additional collateral. Collateral deletion can be quick and not always predictable.
Submitted by: Cointelligence
#Yavin #explains #mistakes #entrepreneurs #field #toucan #economy