Centralized Trading Platform (CEX)
Examples: Binance, Coinbase, Kraken
Key Features:
Custodial: The platform holds your funds on your behalf.
User-friendly: Simple interface, technical support, ability to buy with fiat currencies.
High liquidity: Fast trade execution and availability of many trading pairs.
Regulated: Requires identity verification (KYC) and complies with anti-money laundering laws.
Positive Features:
Fast trade execution
Beginner-friendly
Advanced trading tools
Drawbacks:
Do not own your private wallet keys
Prone to hacks or shutdowns
Ability to freeze assets or block accounts
🔸 Decentralized Trading Platform (DEX)
Examples: Uniswap, PancakeSwap, dYdX
Key Features:
Non-custodial: You have full control over your wallet and funds.
Peer to Peer: Transactions occur via smart contracts.
Permissionless: No need for identity verification, anyone can trade.
Positive Features:
Full control over assets
Maintains privacy
Censorship resistant
Drawbacks:
Lower liquidity (for some assets)
Slower and somewhat complex for beginners
May contain vulnerabilities in smart contracts
💡 Summary
ElementCentralized Exchange (CEX)Decentralized Exchange (DEX)CustodyThe platform holds the fundsUser holds their own fundsSpeedFastSlower (depends on the network)PrivacyRequires identity verification (KYC)Usually does not require verificationControlCentral authorityDecentralized governanceSecurityProne to hacksRisk of smart contract vulnerabilitiesAccessibilityBanned in some countriesAvailable globally without restrictions
🧠 Summary
CEX = Convenient but centralized.
DEX = Free but more complex.
Each type serves a different purpose: Beginners prefer centralized platforms, while DeFi users and privacy enthusiasts prefer decentralized platforms.
