#CEXvsDEX101 #CEXvsDEX101 Certainly! Here's a brief overview of the differences between Centralized Exchanges (CEX) and Decentralized Exchanges (DEX):

▎Centralized Exchanges (CEX)

1. Definition: CEX are platforms where users can trade cryptocurrencies through a centralized entity that acts as an intermediary.

2. Examples: Binance, Coinbase, Kraken.

3. Key Features:

• User-Friendly: Typically have a more intuitive interface and user experience.

• Liquidity: Generally offer higher liquidity, making it easier to buy and sell large amounts of assets.

• Security: Security measures are implemented by the exchange, but users must trust the platform to safeguard their funds.

• Fiat Support: Often allow users to trade fiat currencies for cryptocurrencies.

• KYC/AML Compliance: Usually require users to complete Know Your Customer (KYC) and Anti-Money Laundering (AML) processes.

4. Risks:

• Hacks and Breaches: CEXs have been targets for hacks, leading to significant losses for users.

• Centralization Risks: Users must trust the exchange to manage their funds and personal information.

▎Decentralized Exchanges (DEX)

1. Definition: DEX are platforms that allow users to trade cryptocurrencies directly with one another without the need for a centralized authority.

2. Examples: Uniswap, SushiSwap, PancakeSwap.

3. Key Features:

• Control Over Funds: Users retain control of their private keys and funds throughout the trading process.

• Privacy: Typically do not require KYC, allowing for greater privacy in transactions.

• Smart Contracts: Trades are executed via smart contracts, enhancing transparency and reducing the risk of manipulation.

• Variety of Tokens: Often support a wider variety of tokens, including new and less well-known projects.

4. Risks:

• Liquidity Issues: May have lower liquidity compared to CEX, which can lead to slippage in trades.

• Complexity: The user interface can be more complex, especially for those unfamiliar with blockchain technology.

• before choosing a platform.