I will be looking into decentralized and hybrid exchanges. Most are token exchanges for things like ERC20 tokens. If you have any suggestions for decentralized or hybrid exchanges, please let us know.

Exchanges have four core functions:

1 Capital deposits
2 Order broadcast
3 Order matching
4 The exchange of tokens

Therefore, in order to be a decentralized exchange, each of these core functions must be decentralized in the following ways:

Traders’ capital must remain in their wallets, and cannot be entrusted to a third party at any stage.
Orders must broadcast directly from trader to trader over an inter-blockchain DHT network overlay. Traders’ apps must compile an order book themselves instead of relying on a central order book service.
Orders must be matched directly between traders. When one accepts another’s order, their apps communicate to set up the coin exchange process, and this is broadcast over the inter-chain network.
The exchange of tokens must be achieved without the involvement of an intermediary, in a manner that does not require counterparties to trust one another beforehand. An atomic swap protocol must be utilised (meaning that either the exchange of both currencies takes place, or nothing takes place), which employs a system called OP_CHECKLOCKTIMEVERIFY to nullify transaction malleability-based attacks.