#CEXvsDEX101

Centralized vs. Decentralized Exchanges

Choosing between a Centralized Exchange (CEX) and a Decentralized Exchange (DEX) is a fundamental decision in crypto. CEXs like Binance or Coinbase are managed by a company, offering user-friendly interfaces, high liquidity, and customer support. They act as custodians of your funds, requiring KYC (Know Your Customer) verification and offering fiat on/off-ramps.

DEXs, such as Uniswap or PancakeSwap, operate on blockchain smart contracts, allowing peer-to-peer trading directly from your wallet. This means you retain full control of your assets ("not your keys, not your crypto" applies more to CEXs). DEXs offer enhanced privacy (no KYC), access to newer tokens, and are censorship-resistant. However, they can be less user-friendly, have lower liquidity for some assets, and require a good understanding of gas fees.

Ultimately, your choice depends on your priorities: convenience and features (CEX) or control and privacy (DEX). Many traders utilize both.