# 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="/files/SXSLRNhjupz9htzCMANU" 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.**


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://whitepaper.peerhive.app/application-and-problems/cryptocurrency-and-exchanges.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.