#CEXvsDEX101 CEX vs DEX 101: Understanding Centralized and Decentralized Exchanges

CEXvsDEX101 is a basic guide to help users understand the key differences between Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) in the world of cryptocurrency trading.

A Centralized Exchange like Binance or Coinbase is operated by a central authority. These platforms are user-friendly, offer high liquidity, and often include customer support. However, users must give up custody of their funds, which means the exchange controls their assets until withdrawn. This can pose a security risk if the platform is hacked or shuts down.

On the other hand, a Decentralized Exchange like Uniswap or PancakeSwap runs on blockchain smart contracts and allows peer-to-peer trading without a central authority. Users retain control of their private keys and funds, enhancing security and privacy. However, DEXs may have lower liquidity, limited customer service, and can be harder for beginners to navigate.

Choosing between a CEX and a DEX depends on your priorities—whether you value convenience and liquidity or privacy and control. CEXvsDEX101 helps new crypto users weigh the pros and cons of each to make informed trading decisions.