DeFi Kingdoms for Commoners #1: Introduction (DEX)
Hello, reader! DeFi Kingdoms for Commoners series is written for audience who have little to no experience in the world of cryptocurrency. My main goal in writing this is to provide in-depth information about DeFi Kingdoms in simpler terms. Happy learning!
What is DeFi Kingdoms?
DeFi Kingdoms is a game, a DEX, a liquidity pool opportunity, a market of rare utility driven NFTs, and it all plays out seamlessly in the incredibly nostalgic form of fantasy pixel art. It is launched on Harmony Network.
In this article, we are answering one question first: What is a DEX?
Decentralized Exchange (DEX)
A decentralized exchange (or DEX) is a marketplace where cryptocurrency transactions occur between traders. DEXs reflect one of crypto’s strengths: to provide financial transactions that are not officiated by banks or brokers.
Central Exchange (CEX) vs. Decentralized Exchange (DEX)
The main difference between CEX and DEX is that CEX allow trading fiat for crypto (ex. USD for Bitcoin) and vice-versa. DEXs are purely for trading crypto for crypto (ex. Bitcoin for Ethereum). Despite this limitation, stable cryptocurrency coins have been introduced in the platform (e.g. USDT, UST, BUSD, USDC, etc.).
Centralized Exchanges (e.g. Binance, Kucoin, etc.) also allow investors to make advanced trading moves that is native to the stock market, such as margin trading, spot trading, and setting limit orders. Decentralized Exchanges, on the other hand, is limited to a collection of smart contracts interacting with each other.
Smart contracts are simply programs stored on a blockchain that run when predetermined conditions are met. It is written using a combination of if-then statements. A network of computers executes the actions when predetermined conditions have been met and verified. These actions could include releasing funds to the appropriate parties, debiting funds, interaction with contracts.
The blockchain is then updated when the transaction is completed.
DeFi Kingdoms as DEX
The Marketplace is where you can access the decentralized exchange aspect of DeFi Kingdoms. Merchant Matoya is the designated non-player character (NPC) to handle trading.
Interacting with him will allow you to start purchasing and selling cryptocurrency tokens at current exchange rates.
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Minimum received is the minimum amount of tokens that you will obtain given the liquidity provided in the exchange.
Price Impact is the estimated impact of your purchase/sell to the current token price.
Liquidity provider fee is given to the liquidity pool providers.
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Since Defi Kingdoms is a decentralized exchange, you can trade any HRC-20 tokens by searching the token name or pasting the contract address.
I am a crypto noob but I am interested. How do I start?
You can start by making an account in a Central Exchange (Binance, Crypto.com, Kucoin, or just ask your crypto friend), then create a Metamask wallet. Stay tuned for the next installment of this series.