#CEXvsDEX101 CEX vs DEX: What's the Difference?
1. What is a CEX? (Centralized Exchange)
Examples: Binance, Coinbase, Kraken
A Centralized Exchange is like a traditional bank or stock exchange. A company runs it and acts as a middleman for buying, selling, and holding crypto.
🔹 Pros:
Easy to use (great for beginners)
High liquidity (faster trades)
Customer support available
Can offer fiat onramps (buy crypto with USD, EUR, etc.)
🔻 Cons:
You don't control your crypto (the exchange does)
Can be hacked
KYC/ID required
Can freeze accounts or restrict trading
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2. What is a DEX? (Decentralized Exchange)
Examples: Uniswap, PancakeSwap, SushiSwap
A Decentralized Exchange runs on smart contracts with no central authority. You trade directly from your wallet, peer-to-peer.
🔹 Pros:
You control your funds (self-custody)
No KYC (usually)
Permissionless (anyone can use)
New tokens often launch first here
🔻 Cons:
Less beginner-friendly
Lower liquidity on small tokens
Gas fees (especially on Ethereum)
No customer support
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🔑 Key Differences:
Feature CEX DEX
Custody Centralized (they hold it) Decentralized (you hold it)
Speed Fast Depends on network
KYC Required Yes No
Security Risk Platform risk (hacks) Smart contract bugs
Control Exchange User
Fiat Support Yes Rare
User Friendly Yes Sometimes confusing
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🧠 When to Use Which?
Use a CEX if you're a beginner, want to cash out to fiat, or need customer support.
Use a DEX if you care about privacy, decentralization, or want early access to new tokens.
