# Decentralized Exchange
A form of [market making](market-maker.md) done via a [smart-contracts](smart-contracts.md). In this setup the [order-book](order-book.md) is based on peer-to-peer transactions instead of through a central party like a [crypto exchange](crypto-exchange.md). This contrasts with [AMM](AMM.md) (automated market makers) who don't have an [order book](order-book.md) and instead use [liquidity pools](liquidity-pool.md).

Decentralized exchanges lack the ability to withdraw currencies like [dollar](dollar.md) and Euros because they have no access to the [banking](bank.md) system to issue payments.

See also [crypto exchange](crypto-exchange.md), [bucket shop](bucket-shop.md), [mixer](mixer.md) and [money laundering](money-laundering.md).

## References
1. Allen, Hilary J. 2022. ‘DeFi: Shadow Banking 2.0?’ William & Mary Law Review, Forthcoming.
1. Walch, Angela. 2019. ‘Deconstructing ‘Decentralization’: Exploring the Core Claim of Crypto Systems’. C. Brummer (Ed.), Crypto Assets: Legal and Monetary Perspectives, 1–36. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3326244.
1. Anker-Sørensen, Linn, and Dirk A Zetzsche. 2021. ‘From Centralized to Decentralized Finance: The Issue Of’. Available at SSRN 3978815. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3978815.
1. Aramonte, Sirio, Wenqian Huang, and Andreas Schrimpf. 2021. ‘DeFi Risks and the Decentralisation Illusion’, 16.
1. Barbereau, Tom, Reilly Smethurst, Orestis Papageorgiou, Johannes Sedlmeir, and Gilbert Fridgen. 2022. ‘Decentralised Finance’s Unregulated Governance: Minority Rule in the Digital Wild West’. Available at SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4001891.
1. Soatok. 2021. ‘Against Web3 and Faux-Decentralization’. Dhole Moments. 19 October 2021. https://soatok.blog/2021/10/19/against-web3-and-faux-decentralization/.