Nudex: The evolution of Decentralized Trading vs. AMM and CEX

These days, the crypto trading consists of highly developed distributed systems that offer fresh ideas for market players.

At NuDEX we have an Order Book DEX model, which has key advantages over traditional Automated Market Makers (AMM) and Centralized Exchanges (CEX). In this article, we will discuss their differences and how NuDEX positions itself as an efficient alternative for traders.

Let’s first clarify some concepts about the MMA Model, in cryptocurrency trading platforms it generally refers to a fee system based on Market Maker & Market Taker (MM & MT).

This model divides traders into two main categories.

Market Makers

These are traders who place orders on the book (limit orders) that are not executed immediately. They contribute to the liquidity of the exchange, as they allow other traders to take those orders. They usually receive lower fees or even rebates for adding liquidity.

Market Takers

These are traders who execute orders immediately at the market price (market orders). They consume the liquidity available on the platform.They generally pay higher fees because their action takes liquidity from the market.

And it is essential that we understand these two concepts in order to better assess the qualities and benefits that NuDEX has as a tool in our trading.

How does it work in practice?

A cryptocurrency exchange with the MMA Model adjusts its fees depending on whether the trader is a maker or a taker.

Fees for makers are usually lower

Fees for takers are usually higher because their action reduces market liquidity.

NuDEX vs. AMM DEX

AMM-based DEXs use liquidity pools to facilitate trading, with a fee structure generally fixed around 0.30% although it can change slightly depending on the DEX. While this system simplifies trading, it does have some limitations:

Fee comparison:

NuDEX (VIP1): Taker fee: 0.20% | Maker fee: 0.10%

AMM DEXs: Typically 0.30%

NuDEX offers lower fees than AMMs, benefiting traders looking for greater cost efficiency.

Liquidity requirements:

Order Book DEXs (NuDEX): Market depth is favored to avoid slippage.

AMM DEXs: Automatically provide liquidity, but can generate impermanent losses and high slippage on large transactions.

For this reason, we see that NuDEX is more suitable for both large operations and professional traders who require high liquidity and more accurate prices, as well as for small traders who operate with limit operations in their trades.

NuDEX vs. Centralized Exchanges (CEX)

CEXs usually offer lower fees due to their centralized structure and higher liquidity, but they come at a very high cost in terms of the independence and privacy that the user can have. NuDEX offers a benefit in its decentralization for those who value privacy, security, and full control over their assets. As we will see below, the price difference is very small, but the benefit of decentralization cannot be measured in numbers. For traders, operating on a decentralized exchange is a utility that cannot be valued for its high operating benefit.

Fee comparison:

Typical CEXs: Taker 0.10% | Maker 0.10%, with significant discounts for high-volume traders.

NuDEX (VIP1): Taker 0.20% | Maker 0.10%.

As we can see, NuDEX has slightly higher fees than CEXs, but the advantages of decentralization and security are something that cannot be paid for.

Create your account in NuDEX now.