#CEXvsDEX101

When it comes to cryptocurrency trading, you primarily choose between Centralized Exchanges (CEX) and Decentralized Exchanges (DEX).

CEXs, like Binance or Coinbase, act as intermediaries, holding your funds in custody and facilitating trades. They offer user-friendly interfaces, high liquidity, fiat on/off-ramps, and customer support. However, they require KYC (Know Your Customer) verification, and your funds are vulnerable to exchange hacks or regulatory actions.

DEXs, such as Uniswap or PancakeSwap, allow peer-to-peer trading directly from your crypto wallet via smart contracts. They prioritize self-custody, privacy (often no KYC), and censorship resistance. While offering a wider array of nascent tokens, DEXs can be less user-friendly, have lower liquidity for certain pairs, and involve variable network (gas) fees. The choice depends on your priorities: convenience and features (CEX) versus control and privacy (DEX).