#CEXvsDEX101
🏛️ CEX vs DEX 101 – Explained Simply
🔹 What is a CEX (Centralized Exchange)?
A Centralized Exchange like Binance.com is a platform run by a company that facilitates crypto trading.
✅ Pros:
User-friendly (good for beginners)
High liquidity (fast trades, tighter spreads)
Wide variety of coins and trading tools (spot, margin, futures)
Customer support
Fiat on/off ramp (buy crypto with bank cards, etc.)
❌ Cons:
Custodial: You don’t control your keys (“Not your keys, not your coins”)
KYC/AML: You must verify identity (privacy concerns for some)
Vulnerable to hacks, regulatory shutdowns, or freezing of funds
🔄 Example:
You trade BTC/USDT on Binance, using their app. Your funds are held by Binance until you withdraw.
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🔸 What is a DEX (Decentralized Exchange)?
A Decentralized Exchange like Uniswap, PancakeSwap, or dYdX runs on smart contracts—no central authority.
✅ Pros:
Non-custodial: You control your wallet and private keys
Permissionless: No KYC; anyone with a wallet can trade
Often faster for token launches (e.g., INIT on PancakeSwap before Binance)
❌ Cons:
Lower liquidity than CEXs
Higher slippage and gas fees (especially on Ethereum)
Harder for beginners (you need a Web3 wallet like MetaMask)
Limited customer support
🔄 Example:
You connect MetaMask to Uniswap, swap ETH for a new token. The DEX never holds your funds.
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🔁 Summary Table
Feature CEX (e.g. Binance) DEX (e.g. Uniswap)
Control of funds Platform controls (custodial) You control (non-custodial)
KYC required ✅ Yes ❌ No
Ease of use ✅ Beginner friendly ⚠️ Needs Web3 knowledge
Liquidity 🔼 High 🔽 Varies by token/pair
Security risk Platform risk (hacks/freeze) Smart contract risk
Fees Low (but vary) Gas fees (high on ETH)
Token availability Top-tier coins + new listings New/early-stage tokens
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🧠 Which One Should You Use?
Use a CEX like Binance if you're:
New to crypto
Trading major coins
