In today's turbulent digital currency transactions, decentralized exchanges (Dex) have attracted much attention. However, in fact, most people mistakenly believe that Dex is equivalent to security, ignoring the potential risks. This article will delve into the myths and real challenges of decentralized exchange security and reveal the truth behind it.

 The popularity and security misunderstandings of decentralized exchanges

 Potential security threats: smart contract vulnerabilities

In Dex, smart contracts are a key component for executing transactions. However, smart contracts are not absolutely safe, and there is a risk that vulnerabilities will be exploited by criminals. The multiple smart contract vulnerability incidents on the Ethereum network are a vivid example. Hackers used smart contract vulnerabilities to successfully attack multiple decentralized exchanges, resulting in huge financial losses. This shows that even decentralized exchanges are not a monolithic entity, and security is not absolute.

 Hidden dangers to user asset security: improper private key management

Another key factor affecting the security of decentralized exchanges is the user's own private key management problem. The private key is the only certificate of the user's digital assets. Once the private key is leaked or lost, the user's assets will face huge risks. Many users do not properly keep their private keys when using Dex, and even directly store their private keys on the network, which provides hackers with an opportunity. Therefore, improper private key management is also one of the important reasons for Dex security vulnerabilities.

 Lack of supervision and relief mechanism: user rights are damaged

Unlike traditional centralized exchanges, decentralized exchanges lack supervision and protection from regulatory agencies. Once users encounter problems such as asset loss and transaction disputes on Dex, it is often difficult to get effective relief. In recent years, there have been many cases where users are helpless because of problems encountered in transactions on Dex. This lack of supervision and relief mechanism has also cast a shadow on the security of Dex.

 How to improve the security of decentralized exchanges

In view of the security risks of decentralized exchanges, it is necessary for us to take a series of measures to improve their security. First, users should strengthen their awareness of private key management, keep their private keys properly, and avoid asset losses due to private key leakage. Secondly, Dex platforms should strengthen smart contract security audits, fix vulnerabilities in a timely manner, and ensure the stability and security of the trading system. In addition, regulatory authorities should also strengthen supervision of Dex, establish a sound user rights protection mechanism, and provide users with a safer trading environment.

 Conclusion

In summary, although decentralized exchanges have shown great potential in the field of digital currency, their security still faces many challenges. Smart contract vulnerabilities, improper private key management, lack of supervision and relief mechanisms, etc., all affect the security of Dex to a certain extent. Only by continuously strengthening security awareness, strengthening technical audits, and strengthening the construction of supervision and relief mechanisms can we better protect the security of users' assets on decentralized exchanges and make digital currency transactions more secure and convenient.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

A recent report from crypto exchange ranking platform Cer
Live revealed that 14 of the top 25 decentralized exchanges (DEXs) scored poorly for cybersecurity. The report looked at a variety of unique issues faced by most DEXs, including fake token listings, widespread slippage, trade confirmation delays, and a lack of data on listed trading pairs.

They also looked at whether each exchange had undergone a security audit, whether it offered bounties to encourage the public to find bugs, whether it ensured adequate end-to-end security, and more.

Each exchange was then rated between 1-10 based on its overall security.

CER considers any score above 8 to be classified as “high.” Scores between 6 and 8 are considered “good,” and exchanges below 6 are considered “low” and therefore “unsafe.” Of the 25 exchanges analyzed, only two DEXs received a “high” security score: Uniswap and Syntetyx.

Source: CER

CER criticized the audit practices of low-scoring exchanges, saying that many failed to re-audit the services they offer after recent code additions. For any exchange that is considered outdated, its score is lowered. Other exchanges do not publish public audit reports at all:

"Six exchanges (24%) have failed security audits or have not publicly announced that they have been audited. It should be noted that unaudited exchanges cannot be considered secure."

Some of the 25 exchanges hired individual researchers rather than professional companies to complete the audit. The authors of this report strongly advise against this practice. Considering the incredible growth of DeFi in the past few months, the researchers concluded that DEX users are generally more vulnerable to fraud than hacking:

"Although decentralized exchanges have not suffered any major hacks compared to centralized platforms, DEX users are actually more vulnerable to fraudulent attacks."

The CER report ultimately determined that 92% of the top 25 DEXs need to pay more attention to security. They encourage these exchanges to follow the industry's existing best practices in the future to ensure a safe trading environment for their users.

With the rapid development of the cryptocurrency market, decentralized exchanges (Dex) have attracted much attention. People are increasingly interested in Dex and regard it as a safer option than traditional centralized exchanges. However, there is a serious misunderstanding in this concept, that is, they think that Dex means absolute security. In fact, most people do not realize that Dex also faces various security challenges.