This article delves into the world of decentralized exchanges (DEXs), a type of cryptocurrency exchange that operates without intermediaries. Historically, centralized exchanges have dominated the market, but with the rise of blockchain technology, decentralized exchanges have gained traction. DEXs are designed to emulate the functionality of centralized exchanges but with the backend residing on the blockchain. This means users do not need to give up control of their funds and do not need to trust intermediaries with their money, unlike with centralized exchanges.

In DEXs, orders are executed through smart contracts and users retain control of their funds at all times. Some DEXs operate on a single blockchain, such as Ethereum or Binance Chain, while others work across multiple blockchains. There are various types of DEXs, with some relying on on-chain order books, where all orders are recorded on the blockchain for transparency. This, however, can be impractical as every node on the network must record the order, resulting in fees and slow transactions.

Deri Protocol is a decentralized protocol for trading derivatives, allowing users to hedge, speculate, and arbitrage on chain. Trades are executed through automated market maker (AMM) paradigms and positions are tokenized as NFTs. Deri Protocol has processed over 100 billion USD in trading volume and has become one of the most used DeFi derivative protocols. It is designed with DeFi and financial derivatives in mind and operates on the Ethereum blockchain.