A Decentralized Exchange System Development based on the Blockchain Technology

Ghaemmaghami, Zahra; Mohammadpour, Davood

doi:10.22034/apj.2025.723058

A Decentralized Exchange System Development based on the Blockchain Technology

Document Type : Original Research Article

Authors

Zahra Ghaemmaghami ^¶

Davood Mohammadpour

Department of Computer Engineering, Faculty of Management and Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran

10.22034/apj.2025.723058

Abstract

Nowadays, blockchains are best known for their vital role in digital currency systems in maintaining a secure and decentralized record of transactions, but their use cases are not limited to digital currencies. Blockchains can be used to make data immutable in any industry. A decentralized cryptocurrency exchange is a new type of cryptocurrency market trading platform that eliminates all intermediaries, enables digital market trading, and uses blockchain technology and smart contracts, and is very secure. Due to the necessity and importance of the increasing development of blockchain-based decentralized digital exchanges, this article first introduces the achievements and benefits of these exchanges and then, based on a case study, a basic application system is developed to create a decentralized exchange for buying and selling tokens using smart contracts. Using blockchain technology, this system enables the secure and transparent exchange of VoteCoin tokens. Its user interface, using React and interacting with MetaMask, allows users to easily interact with the system and participate in the buying and selling of tokens. This approach provides a foundation for a practical and tangible understanding of decentralized digital exchanges and their functioning, and can serve as a guide for developers and users in this field.

Keywords

Blockchain

Decentralized Exchange

Digital Currency

Platform

[1] Capponi A, Jia R. The adoption of blockchain-based decentralized exchanges. arXiv preprint arXiv:2103.08842. 2021 Mar 16.

[2] Wu X, Deng W, Quan Y, Zhang L. Trust dynamics and market behavior in cryptocurrency: A comparative study of centralized and decentralized exchanges. arXiv preprint arXiv:2404.17227. 2024 Apr 26.

[3] Han J, Huang S, Zhong Z. Trust in defi: an empirical study of the decentralized exchange. Available at SSRN. 2021 Jul 26;3896461.

[4] Patel H. A pure block chain based decentralized exchange. Cryptology ePrint Archive. 2014.

[5] Aspris A, Foley S, Svec J, Wang L. Decentralized exchanges: The “wild west” of cryptocurrency trading. International Review of Financial Analysis. 2021 Oct 1;77:101845.

[6] Hägele S. Centralized exchanges vs. decentralized exchanges in cryptocurrency markets: A systematic literature review. Electronic Markets. 2024 Dec;34(1):33.

[7] Lin LX. Deconstructing decentralized exchanges. Stan. J. Blockchain L. & Pol'y. 2019;2:58.

[8] Warren W, Bandeali A. 0x: An open protocol for decentralized exchange on the Ethereum blockchain. URl: https://github. com/0xProject/whitepaper. 2017 Feb 21:04-18.

[9] Harvey CR, Hasbrouck J, Saleh F. The evolution of decentralized exchange: Risks, benefits, and oversight. Benefits, and Oversight (June 15, 2024). 2024 Jun 15.

[10] Ciesielska-Maciągowska D, Spyra Ł. Cryptocurrency exchanges in the decentralized finance system. Kwartalnik Nauk o Przedsiębiorstwie. 2025 Mar 31;75(1):23-33.

[11] Johnson KN. Decentralized finance: Regulating cryptocurrency exchanges. Wm. & Mary L. Rev.. 2020;62:1911.

[12] Heimbach L, Wang Y, Wattenhofer R. Behavior of liquidity providers in decentralized exchanges. arXiv preprint arXiv:2105.13822. 2021 May 28.

[13] Nummelin S. Risks and benefits of centralized and decentralized cryptocurrency exchanges and services.

[14] Dai C. DEX: A DApp for the decentralized marketplace. Blockchain and Crypt Currency. 2020 Apr 16;95.

[15] Mohan V. Automated market makers and decentralized exchanges: a DeFi primer. Financial Innovation. 2022 Feb 14;8(1):20.

[16] Schär F. Decentralized finance: on blockchain and smart contract-based financial markets. Review of the Federal Reserve Bank of St Louis. 2021;103(2):153-74.

[17] Röckener M. Centralized Crypto Exchanges Incorporating Decentralized Features: Factors Driving Implementation and Impact on the Competitive Landscape (Doctoral dissertation, Hochschule Mittweida).

[18] Lehar A, Parlour C. Decentralized exchange: The uniswap automated market maker. The Journal of Finance. 2025 Feb;80(1):321-74.

[19] Helmy B, Cachin C, Micic J. Exploring blockchain-based decentralized exchanges [Internet]. 2021 Oct 10