The choice between centralized (CEX) and decentralized (DEX) exchanges is not just a matter of convenience, but a strategic decision that affects security, access to liquidity, and the level of control over assets.
Pros and cons of CEX and DEX
✅ Centralized exchanges (CEX)
- Pros: High liquidity, user-friendly interface, fast transactions, support for fiat currencies, protection from technical difficulties.
- Cons: KYC requirements, asset storage by the exchange (risk of loss due to hacking), potential censorship, dependence on regulators.
✅ Decentralized exchanges (DEX)
- Pros: Full control over assets, no KYC, resistance to censorship, innovative tools (e.g., automated market makers).
- Cons: Lower liquidity, potential high fees, complexity of the interface, dependence on the network (e.g., Ethereum).
Personal choice and usage strategies
If instant liquidity and convenience are needed, CEX is indispensable for large transactions. However, for maintaining complete autonomy and protection against potential account blocking, DEX becomes the better option.
What to pay attention to when choosing?
- Security: Level of protection and ways to store assets.
- Liquidity: Trading volume and price slippage.
- Fees: The difference between platforms can be significant.
- Convenience: Accessibility of the interface and the need to learn about DeFi.
Advice for a newcomer in DEX
1️⃣ Use trusted wallets (e.g., MetaMask).
2️⃣ Research network fees before a transaction (e.g., gas on Ethereum).
3️⃣ Start with small amounts to understand the principles of liquidity and swaps.
4️⃣ Pay attention to security - check contracts before connecting.
Every trader forms their own strategy. Flexibility in choosing an exchange based on current tasks allows minimizing risks and maximizing opportunities in the market.
