#CEXvsDEX101

#CEXvsDEX101 CEX

A CEX (short for Centralized Exchange) is a virtual platform where the buying, selling, and trading of cryptocurrencies, tokens, and even NFTs takes place. In this case, the CEX belongs to a company, which manages its users' funds, providing greater trust for the clients it works with.

Cybersecurity

A fundamental point that CEXs must safeguard is cybersecurity, as being centralized makes them vulnerable to attacks that could deplete users' funds. For example, in 2011, when the technology was still in its infancy, Mt.Gox suffered one of the largest thefts in crypto history, with the theft of 2,000 bitcoins.

DEX

On the opposite side of CEXs are DEXs or decentralized exchanges (short for Decentralized Exchange), an evolution of the former. In DEXs, all operations are transferred to the blockchain, running on smart contracts that handle everything within the platform.

Smart Contracts as governance

Instead of having a company at the center of all operations, in this case, there is a smart contract, which largely eliminates intermediaries and makes DEXs more secure and transparent. In this way, users of the exchange maintain control of their assets at all times, adding a high level of security, privacy, and even anonymity. For this reason, the end user also assumes responsibility for its use, management, and custody.