#CEXvsDEX101 In the world of cryptocurrencies, the exchange of digital assets mainly takes place on two types of platforms: CEX and DEX.

#CEX vs. #DEX : Understanding the Difference

A CEX (Centralized Exchange) is like a traditional exchange. Funds are deposited with a company that acts as an intermediary. They offer a user-friendly interface, high liquidity, and advanced features. However, by relying on a centralized entity, one must trust its security and relinquish total control of the funds to a third party. This means that the company holds custody of the assets, which presents a risk of hacking or censorship.

On the other hand, a DEX (Decentralized Exchange) is an exchange platform that operates directly on a blockchain. Here, transactions occur from person to person, without an intermediary holding the funds. Total control of the assets is maintained in one's own wallet. Although they may be less intuitive for beginners and offer lower liquidity in some pairs, they provide greater privacy and resistance to censorship. The choice between CEX and DEX depends on each user's priorities regarding convenience, security, and control of their funds.