# Cryptocurrency and Exchanges

## Centralized Exchange (CEX)

**CEX** Acted as a great payment and trading platform for holders to trade and speculate on cryptocurrency.

### CEX provides Crypto Loans

<figure><img src="https://1125066014-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FKZ1x53rs0AgHNc04QzwJ%2Fuploads%2F5Ug7fdhonZcXSBfSpa1k%2FUntitled%202.png?alt=media&#x26;token=3a138962-c48a-4359-8074-e3455abdc415" alt=""><figcaption><p>CEX crypto loan work in accordance with the banking loan mechanism without fractionalized lending. here</p></figcaption></figure>

Such crypto loans provide the opportunity for more speculation within the crypto economy, the steps are as follows:-

1. Obtain assets on crypto exchanges.
2. Move assets to an exchange that provides a loan (Binance)
3. Obtain a quotation for a crypto loan
4. Crypto loans are often overcollateralized typically ≤90% of the total value of the assets.
5. The crypto loans asset were then moved onto the platform’s exchange, which allows the holder to continue speculating on the crypto economy.

## So how does HODLer earn?

### Crypto Speculation

This involves trading and flipping for a certain cryptocurrency in the market, where HODLer would earn the difference between buying and selling of the assets.

### Crypto Staking

Staking - Locking assets for a period of time to help support a blockchain

For each of the blocks being added via PoS activity HODLer able to earn more cryptocurrency

### Gaming

Playing a play-to-earn game while earning crypto at the same time

### Crypto Loan

Earning crypto by borrowing own crypto asset as a loan asset

However, such loans are not controlled by the lender

These are operated by the CEX directly.

### The current issue surrounding the Cryptocurrency industry

1. **Poor checks and balances within CEX are one of the major reasons causing the collapse of CEXs such as FTX.**
2. **Strong overleverage speculation of the cryptocurrency market.**
3. **The high volume of liquid assets in the cryptocurrency industry is not being placed into good economic output.**
4. I**nsufficient use cases that push for general acceptance of cryptocurrency.**