Key Differences
Feature Centralized Exchange (CEX) Decentralized Exchange (DEX)
Control Run by a company (e.g., Binance) No central authority
Custody You trust the exchange with your funds You control your wallet (non-custodial)
Security Risks Hacking risks (but often insured) Smart contract risks (e.g., exploits)
Liquidity High (market makers & order books) Lower (dependent on liquidity pools)
Fees Higher (trading & withdrawal fees) Lower (but gas fees can spike)
KYC/AML Required (identity verification) Anonymous (no KYC)
Trading Pairs More options (BTC/USDT, etc.) Mostly crypto-only (no direct fiat)
Speed Faster (matching engines). Slower (blockchain confirmations)
Regulation Compliant with laws (but can ban users). Unregulated (but may face govt. pressure).
When to Use Which?
✅ CEX → Beginners, high liquidity, fiat on/off ramps.
✅ DEX → Privacy, full asset control, DeFi integrations.
Final Thought:
CEX = Convenience (but requires trust).
DEX = Freedom (but higher technical risk).
