#CEXvsDEX101 In the world of cryptocurrencies, CEX and DEX represent two different types of exchange platforms. CEX (Centralized Exchanges) are centralized exchanges, like Binance or Coinbase, that operate with a centralized intermediary, usually a company, that oversees transactions and holds users' funds. On the other hand, DEX (Decentralized Exchanges), like Uniswap, are decentralized platforms that operate without a central intermediary, using smart contracts on a blockchain to facilitate transactions.
Here is a more detailed comparison:
CEX (Centralized Exchanges):
Operate with an intermediary:
A company controls the platform, transactions, and users' funds.
Ease of use:
They generally offer more intuitive interfaces, customer support, and higher liquidity, making them ideal for beginners.
Greater regulation:
CEX are subject to regulation and compliance, which can provide greater security.
Risk of centralization:
Due to the centralized nature, CEX are vulnerable to attacks and may face solvency issues.
Custodial waiver:
Users must trust the company to hold their funds, which involves a risk of loss in case of bankruptcy or attack.