#CEXvsDEX101
The main difference between a CEX (Centralized Exchange) and a DEX (Decentralized Exchange) lies in their operation and governance structure. CEXs are centralized exchange platforms managed by a central entity that controls transactions and funds. DEXs, on the other hand, are decentralized platforms that operate on the blockchain, without a central authority, allowing users to trade directly with one another.
CEX (Centralized Exchange):
Central Authority:
A central entity (company or organization) manages the platform, transactions, and funds.
Control and Risks:
CEXs can be more vulnerable to hacks and company bankruptcies.
Speed and Liquidity:
CEXs can offer faster transactions and greater liquidity due to their central infrastructure.
Regulation:
CEXs are often subject to strict regulations.
DEX (Decentralized Exchange):
Without a Central Authority:
DEXs operate on the blockchain, allowing users to trade directly with each other without intermediaries.
Control and Security:
Users retain control of their funds and private keys, thereby reducing the risk of hacking.
Complexity:
DEXs can be more complex to use and may suffer from a lack of liquidity compared to CEXs.
Transaction on the Blockchain:
Transactions are recorded on the blockchain, which can make transactions slower.
