FAQ Answer
P2P Crypto Basics
What is the difference between P2P trading and a centralized exchange?
P2P trading connects individual buyers and sellers through offers and direct fiat payments. A centralized exchange typically holds user balances and matches trades through its own order book.
Answer
P2P trading connects a buyer with an individual seller, while a centralized exchange typically matches orders inside a platform-controlled order book. The main differences involve custody, pricing and how fiat payments are handled.
Feature | P2P trading | Centralized exchange |
Counterparty | Another user or vendor | The exchange’s order book |
Pricing | Defined by individual offers | Determined by market orders and liquidity |
Fiat payment | Sent directly between users | Usually deposited into the exchange first |
Crypto custody | Controlled by users and protected during the trade by escrow | Typically held in exchange-managed accounts |
Payment methods | Depends on each offer | Limited to the exchange’s supported deposit methods |
On Senpero, the seller commits the agreed cryptocurrency to an on-chain escrow contract. The buyer then sends the fiat payment directly to the seller using the offer’s payment method. After confirming receipt, the seller releases the cryptocurrency from escrow.
P2P trading provides more flexibility around payment methods, currencies and individual pricing. However, users must evaluate the counterparty, follow the offer terms and verify fiat payments carefully. A centralized exchange simplifies execution, but requires users to rely more heavily on the exchange’s custody, banking access and internal systems.