Centralized exchanges (CEXs) are run by companies that hold your funds, offer user-friendly interfaces, high liquidity, and customer support, but require you to trust them with your assets and personal information, including KYC verification. They are more regulated and appeal to institutions, but are targets for hacks.
Decentralized exchanges (DEXs) let you trade directly from your wallet, giving you full control and privacy, with no KYC required. DEXs use smart contracts for peer-to-peer trading, have lower fees, and are less prone to large-scale hacks, but can be harder to use, offer lower liquidity, and require users to manage their own security.
Hybrid exchanges are emerging, combining features of both CEXs and DEXs to balance usability, compliance, and user control.
