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Centralized Exchanges (CEXs)
Pros:
- Ease of Use: User-friendly interfaces, ideal for beginners.
- Liquidity: Higher trading volumes ensure faster trades and better price execution.
- Fiat On/Off Ramps: Support for direct fiat deposits and withdrawals.
- Customer Support: Dedicated support teams for issue resolution.
- Advanced Features: Offer margin trading, futures, and staking options.
Cons:
- Custodial Risk: Funds are held by the exchange, vulnerable to hacks or mismanagement.
- KYC Requirements: Mandatory identity verification reduces privacy.
- Centralized Control: Susceptible to government regulations or platform shutdowns.
- Fees: Higher trading and withdrawal fees compared to DEXs.
Decentralized Exchanges (DEXs)
Pros:
- Non-Custodial: Users retain control of their private keys and funds.
- Privacy: No KYC requirements, enhancing user anonymity.
- Decentralization: Resistant to censorship and single points of failure.
- Token Variety: Access to a broader range of tokens, including new or niche projects.
Cons:
- Complexity: Steeper learning curve, requiring familiarity with wallets and blockchain.
- Liquidity: Lower trading volumes can lead to slippage or slower trades.
- No Fiat Support: Typically crypto-to-crypto only, requiring external fiat conversion.
- Limited Support: No centralized customer service; users rely on community or self-help.
- Smart Contract Risks: Vulnerabilities in code can lead to exploits or fund loss. $WCT
