#CEXvsDEX101

Here's a quick breakdown of Centralized Exchanges (CEX) vs Decentralized Exchanges (DEX):

šŸ” Centralized Exchange (CEX)

Examples: Binance, Coinbase, Kraken

Key Features:

Custodial: You trust the exchange to hold your funds.

User-friendly: Great UI, customer support, fiat on-ramps.

High liquidity: Faster trades, smaller spreads.

KYC required: Must verify your identity.

Risk: Vulnerable to hacks and mismanagement (e.g., FTX collapse).

šŸ§¬ Decentralized Exchange (DEX)

Examples: Uniswap, SushiSwap, PancakeSwap

Key Features:

Non-custodial: You control your private keys.

Permissionless: No account needed; just connect your wallet.

Transparent: On-chain trades, open-source smart contracts.

Lower liquidity: Slippage can be high for large trades.

No KYC: Greater privacy, but limited fiat support.

āš–ļø Quick Comparison

Feature CEX DEX

Control Exchange holds your assets You hold your assets

KYC/AML Required Not required

Speed Fast Depends on blockchain

Security Central point of failure Smart contract risk

Fiat support Yes Rare

Privacy Limited High

šŸ§  TL;DR:

CEX = convenience + liquidity but less control.

DEX = control + privacy but requires more responsibility.

$WCT