Why Consider This Transition?

In the world of digital assets, especially within the niche of Decentralized Finance (DeFi), a consistent talking point is the prioritizing of Decentralized Exchanges (DEX) over Centralized Exchanges (CEX). While the convenience of a CEX is undeniable (where all one needs to access an account is a User ID and credentials, such as an email address and password), history has proven that CEXs are unreliable in terms of protecting user funds. That is to say, when a CEX gets into hot water (as so often happens), it is very possible that users lose access to their CEX-stored funds—this is true whether the CEX has acted maliciously or not.

It is for their safeguarding against these centralized single points of failures that DeFi prioritizes the use of DEXs. In upholding the decentralized virtues of self-custody and privacy, DEXs bypass invasive Know-Your-Customer (KYC) or Anti-Money-Laundering (AML) requirements, eliminating the need to disclose user identity to execute transactions.

Steps Required for the CEX → DEX Transition 

And yet, user adoption of DEXs has yet to truly challenge that of their centralized counterparts, primarily due to the perceived difficulty in transitioning from one to the other. Indeed, making this transition—from a centralized exchange (CEX) to a decentralized exchange (DEX)—need not be daunting. All that is needed in a place of trust is the willingness to learn both how to manage a self-custodial wallet and how to connect directly to a DEX interface.

Creating and Using a Self-Custodial Wallet

From cold wallets (e.g., Ledger) to mobile wallets (e.g., Vultisig) to browser extension wallets (e.g., CTRL Wallet), self-custodial wallets vary widely in type. For all of these, a most critical element to successful user management is understanding how they employ what are called Seed Phrases (or, in the case of Vultisig, Vault Shares). A Seed Phrase is a randomly generated set of 12 or 24 words created with every new wallet (again, this is aside from Vultisig, which uses a different security mechanism: Vault Shares). The Seed Phrase is the “secret password” that enables you to both access and manage your funds and transfer your wallet (and its contents) to other compatible wallet software.

While self-custodial wallets do liberate the user from third-party trust, they do come with higher levels of responsibility and accountability. This is because the security of this type of wallet rests entirely on the shoulders of the user: if you lose your Seed Phrase (and you’ve also lost or uninstalled the wallet software), there is no recourse to regain access to your funds. In such cases, there is nobody (including the wallet software developers) who can help you, and your funds are effectively lost. Similarly, if someone learns the contents of your Seed Phrase, then they will have full access to your funds and could easily steal them.

Connecting to a DEX Interface

Once the self-custody wallet has been created and its Seed Phrase has been secured, one more step is required to complete the transition from a CEX to a DEX: this is the actual connecting to a DEX. These DEXs may come in various formats, some of which require independent interfaces for use. This is the case for the Maya Protocol: while it is a DEX, Maya is not housed within a single interface. Instead, it—in the full spirit of decentralization—relies on multiple independent interfaces by which users can engage with Maya. While each of these, in their own way, takes a unique approach to wallet connection and user experience, all share the purpose of providing access to Maya Protocol’s features and functionalities.

A conscious step toward financial sovereignty

Transitioning from a CEX to a DEX is almost never done by happenstance: It is a deliberate choice taken by a user who both manages digital finance assets, as well as prioritizes decentralized self-custody and privacy. While moving away from CEXs does lay more accountability and responsibility on the shoulders of the DEX user, these obstacles might be perceived as negligible in light of the all-important safety and long-term security of one’s assets. In the eyes of DeFi, self-custody and privacy are inherent rights in finance—rights that are only found in DEXs.

Further Reading

Here is a list of all interfaces & wallets that facilitate engagement with Maya Protocol. 

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See here for further reading on wallets and interfaces, generally. 

Read here for more reasons why a CEX may not be the best choice for you.