The term DEX stands for decentralized exchange. These days there are different types of decentralized exchanges on the market. Stablecoins have become a very popular way for these platforms to run their business. A stablecoin DEX is essentially the currency that is used in a particular platform to be able to process your transactions. It’s like when you go to a casino and you have to buy chips to be able to play in tables.

Most of these stablecoin DEX platforms feature pegged assets. That means that the value of the coin is going to be tied to the value of another commodity. In many decentralized exchange platforms their stablecoin is going to be tied down the value of the dollar. This, means that you’re going to be paying in the value of USD for other crypto transactions. It’s a very efficient way to run things to make sure that the platform doesn’t have to deal with processing transactions in a wide array of currencies. A stablecoin serves as a base.

Is It A Good Idea To Invest In A Stablecoin DEX?

There are different ways to be able to get into a stablecoin, and use it as a financial asset. Buying and holding a stablecoin per se isn’t necessarily a strategy that’s going to pay major dividends. What could really be a good business idea is investing in stablecoins to then invest in the different pools that a particular platform like Saddle Finance offer.

When you invest in pools you’re able to earn dividends from your holdings. Something that you definitely won’t get if you just hold your position. In fact, holding a position in a stablecoin is virtually the same as holding your position in the asset that the stablecoin is pegged to. Investing in a pegged asset that is tied to the value of gold could be a bit more interesting for investors than doing so in one tied to the value of the US dollar.

How To Pick The Right Exchange

This is actually one of the best questions that anyone who is looking to get into the decentralized banking world needs to ask themselves. The answer may be more tied to what type of transactions you have to be interested in. If you’re looking to open an account in a decentralized exchange to transfer assets you may be more interested in the fees or lack thereof in anexchange. As well as the safety features it offers, and how easy it is to use.

If you’re looking at crypto assets as an investment, particularly outside of the trading world, then different liquidity pools that a platform can offer should be an aspect to keep an eye on. Another thing that happens is that you start working with clients that already have familiarity with a particular exchange. A lot of times it’s just easier to join them. We’ve talked about Saddle, and what they bring to the table. If you want to look into a platform that can offer a little bit of everything that could be a place to start.