How are you all? I hope you are all doing well. Today I will talk about how decentralized exchanges work. When someone learns about a new crypto, everyone understands how a centralized exchange completes a trade, but they don't understand how a decentralized exchange completes a trade, to be honest, I didn't understand it myself, centralized exchange whose short name is CEX, and decentralized exchange's short name is dex, so you will always notice that exchanges are shortened to CEX and decentralized exchange is shortened to dex, basically centralized exchange buys and sells, that's how trading is completed, but decentralized exchange is the opposite, first of all, after creating a coin, most of the time they list it on decentralized exchanges, and it's very easy, anyone can list a coin on decentralized exchanges, suppose you list a coin, then a total of one billion coins have been created, now if you want, you can set the price of this coin as you wish,

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suppose you want a The token will be worth one dollar, now you have one hundred thousand dollars as funding, now you have to add one hundred thousand tokens from your total supply to liquidity in these decentralized exchanges, and add 100 thousand dollars to liquidity, now you have one hundred thousand dollars in exchange for 100 thousand tokens,

that means the value of each token is one dollar,

Now suppose I buy your token from DEX,

If I buy ten thousand dollars of tokens, then the amount of liquidity will increase, if the token decreases, then the value of the token will increase, for example, it will pump 10%, now if someone buys your token later, then the value of each token will stand at $1.10, just like this, the value of the token increases, and again if I sell the token I have, then the market of the token will again go down,

Basically, the value of the DEX token depends on the liquidity The more liquidity there is, the more the value of the token will start decreasing day by day,

Since no one can control the decentralized exchange even if they want, so there is constant fraud here, many unscrupulous traders list fake tokens here and sell tokens by misleading people, finally they remove liquidity from the decentralized exchange,

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The most strange thing is that you can remove your liquidity from here at any time, and when you remove your liquidity, the trading of the token will stop, or it will crash on a large scale,

So I hope everyone understands, so in this post I want to tell you that you must be careful before buying new coins from these decentralized exchanges,

So I am ending here today, everyone be well,