If you’ve ever bought or sold crypto, you’ve probably used either a CEX (centralized exchange), like where we're at now, or a DEX (decentralized exchange).

They both let you trade, but how they work and what they require from you are very different.

Similarities

  • Both allow you to buy, sell, and trade cryptocurrencies.

  • Both display token prices, charts, and trading pairs.

  • Both aim to provide liquidity and price discovery for digital assets.

Key Differences

  • How they work:

    • CEX: Operated by a centralized company that manages the platform (e.g. Binance).

    • DEX: Runs on smart contracts, with no central authority (e.g. Uniswap, PancakeSwap).

  • User custody:

    • CEX: You deposit funds into the exchange’s wallet.

    • DEX: You retain full control of your assets via a non-custodial wallet (like Trust Wallet or MetaMask).

  • Ease of use:

    • CEX: Beginner-friendly UI, fiat on-ramps, customer support.

    • DEX: More technical; often requires connecting a wallet and paying gas fees.

  • Examples:

    • CEX: Binance ($BNB )

    • DEX: PancakeSwap ($CAKE ), Curve ($CRV )

Real-life Analogy

  • A CEX is like using a stock brokerage app where you trust the platform to manage and keep track of your trades and funds.

  • A DEX is like trading face-to-face using a smart contract where you keep your own wallet, and no middleman holds your money.

Why It Matters

  • CEXs are convenient but come with custodial risk. Therefore, you don’t fully control your keys.

  • DEXs offer privacy, control, and censorship resistance but require more personal responsibility.

  • Knowing when to use each helps you balance security, convenience, and decentralization.

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