#CEXvsDEX101 The abbreviation CEX vs DEX 101 means a basic introduction to comparing centralized and decentralized exchanges in the field of cryptocurrencies. Here’s a simplified explanation:
1. CEX (Centralized Exchange) - Centralized Exchange
- Control: Managed by a company (third-party intermediary).
- Security: Depends on company systems (may be prone to hacks).
- Usability: Easy for beginners, supports payment via Visa/PayPal.
- Liquidity: High due to a large number of users.
- Examples: `Binance`, `Coinbase`, `Kraken`.
2. DEX (Decentralized Exchange) - Decentralized Exchange
- Control: Operates via smart contracts (no intermediary).
- Security: Your funds are under your personal control (non-custodial wallets).
- Usability: Requires technical understanding (like connecting a wallet).
- Liquidity: Depends on liquidity pools.
- **Examples**: `Uniswap`, `PancakeSwap`, `SushiSwap`.
When to use either?
- CEX: If you are a beginner or want a fast fiat trade.
- DEX: If you prefer privacy and full control over your funds.
> Note:
> -CEX*Faster but subject to government regulations.
> -DEX is theoretically more secure, but smart contract errors can cause losses.