#CEXvsDEX101 Centralized Exchanges (CEXs)

What they are: CEXs operate like traditional financial institutions. They are companies that act as intermediaries, holding your funds in their custody and matching buyers and sellers through an order book system. Examples include Coinbase, Binance, Kraken, and CEX.IO.

Key Features:

* Custody: The exchange holds your private keys and controls your funds. You trust the platform to secure your assets.

* Regulation & KYC: CEXs are typically regulated and require users to complete Know Your Customer (KYC) verification (submitting ID, personal information, etc.) to comply with anti-money laundering (AML) laws.

* User-friendliness: Generally have intuitive interfaces, customer support, and familiar trading features.

* Liquidity: Tend to have higher trading volumes and liquidity, allowing for faster execution of trades and less slippage.

* Fiat On-Ramps: Often allow direct deposits and withdrawals of traditional (fiat) currencies (e.g., USD, EUR) to buy crypto.

* Advanced Trading Features: Offer features like margin trading, futures, and stop-loss orders.

* Transaction Speed: Transactions are typically processed off-chain, leading to faster speeds.

Pros of CEXs:

* Ease of Use: Great for beginners due to their user-friendly interfaces and customer support.

* High Liquidity: Easier to execute large trades quickly with minimal price impact.

* Fiat Integration: Convenient for converting fiat to crypto and vice-versa.

* Advanced Tools: Offer a wider range of trading options and features.

* Customer Support: Access to support for troubleshooting and assistance.

Cons of CEXs: