Exchanging in Exodus vs. centralized exchanges
Pros and cons of the Exodus in-app exchange and centralized exchanges.
In this article:
- What is the in-app exchange feature in Exodus?
- What are centralized exchanges?
- Which type of exchange should I choose?
What is the in-app exchange feature in Exodus?
The in-app feature that Exodus offers is more like a connection to a decentralized exchange. When you want to exchange, you send an amount of crypto to our third-party exchange API provider. Because sending your crypto is an on-chain transaction, it costs a network transaction fee. When your exchange is completed, you receive the exchanged crypto back to your wallet.
What are the pros of the exchange feature in the Exodus app?
The in-app exchange has many benefits. Here are some of the pros:
- Easy to use. Exchange crypto in a few intuitive clicks or taps.
- You control your private keys. You always have total control over your private keys, 12-word secret recovery phrase, and funds.
- No limits. Even if third-party API providers have single-exchange maximums, you can exchange as many times as you would like.
- Privacy. There are no forms to fill out or agreements to sign. You can exchange as long as you have crypto in your wallet.
- More crypto-to-crypto pairs. Most assets can be exchanged for the crypto you want in one step.
- Exchange 150+ assets. Multiple third-party exchange API providers offer over 150 assets to choose from, all in one place.
What are the cons of the exchange feature in the Exodus app?
Now let's go over the cons of the Exodus in-app exchange:
- You have to manage your own private keys. With great power comes great responsibility. You are responsible for keeping your private keys and 12-word secret recovery phrase safe.
- No advanced buying or selling options - The in-app exchange allows you to exchange one crypto for another at the current price. It does not offer margin, limit, or stop-loss orders.
- Fluctuating market conditions. Depending on market conditions, including the possibility of rapidly fluctuating prices and variable token liquidity, at times the third-party exchange API providers in Exodus will show higher exchange spreads. You always have the option to wait for more favorable market conditions to complete your exchange.
What are centralized exchanges?
Centralized exchanges, also known as custodial or hosted exchanges, provide a platform to buy and sell cryptocurrencies. These exchanges are similar to brokerages in traditional markets.
To see a list of the most popular exchanges, please check out: Where can I buy Bitcoin and other crypto?
What are the pros of centralized exchanges?
Here are some of the benefits of using centralized exchanges:
- You don't have to manage your private keys. The centralized exchange looks after this on your behalf.
- Advanced buying and selling options. Some centralized exchanges offer the ability to use leverage (buying or selling on credit) as well as set limit and stop-loss orders.
- Buy crypto with fiat. Some exchanges allow you to buy cryptocurrencies with local fiat currencies.
- Sell crypto to fiat. Some exchanges allow you to sell cryptocurrencies for local fiat currency.
- More liquidity. More liquidity, or availability of a token, might lead to lower spreads.
What are the cons of centralized exchanges?
With their pros, centralized exchanges also have their cons.
- You don't have access to your private keys. Without your private keys, you don't have full control over your funds. Not your keys, not your crypto.
- Limits and fees. Centralized exchanges can set withdrawal limits and deposit limits as well as other fees and rules that are not blockchain-based (like transaction fees).
- Exchange hacks. Centralized exchanges can be prime targets for hackers to steal your funds.
- No privacy. You will usually be asked to fill out KYC forms and provide proof of identity to use a centralized exchange.
- Fewer crypto-to-crypto pairs. Often small-cap coins will need to be traded to BTC or a stablecoin before you can trade it to the asset you want.
- Difficult to use. Some centralized exchanges can be geared towards users with lots of experience in trading. Complicated interfaces might make the experience more difficult for the average user.
Which type of exchange should I choose?
In Exodus, you have the option of using the in-app exchange feature, or exchanging through FTX Exchange, which is a centralized exchange that you can access from inside your Exodus wallet.
One of the many great things about crypto is that you decide how you want to control your wealth.
Because crypto can have a steep learning curve, we provide 24/7 support to help you with any questions you might have.