#CEXvsDEX101

🔒 Security & Control

• CEXs

• Custodial wallets with insurance cover (often up to a limit)

• 24/7 customer support and recovery options

• Established compliance & KYC procedures

• You don’t truly “own” your private keys

• Risk of exchange hack or mismanagement

• DEXs

• You keep full custody of your assets (no middleman)

• Non‑custodial, pseudonymous trading

• Often built on transparent smart contracts

• Smart contract risk (bugs, exploits)

• No recourse if you lose your seed phrase or make a mistake

⚡ User Experience & Liquidity

• CEXs

• Ultra‑fast order matching, deep order books, margin/leverage options

• High liquidity on major pairs—ideal for heavy trading and tight spreads

• DEXs

• Impermanent loss risk if you’re providing liquidity

• Slippage on low‑volume pools, but rising with more DeFi adoption

• Gas fees can spike on congested networks (Ethereum, BSC, etc.)

🤔 When to Use Which?

• Use a CEX if you need:

• High‑speed execution for day trading or arbitrage

• Access to advanced order types (OCO, trailing stop, margin)

• Fiat on‑ramps or stablecoin conversions without wrapping

• Use a DEX if you want:

• To swap emerging tokens that aren’t listed on CEXs

• Full control of your assets & on‑chain privacy

• To participate in yield farming or liquidity mining directly

🎯 My Preference & Strategy

I personally split my assets:

1. Long‑term holdings stay in my self‑custody wallet and I use DEXs when rolling into new DeFi projects.

2. Active trading capital lives on a top‑tier CEX for quick trades, low slippage, and leverage opportunities.

💡 Tips for First‑Time DEX Users

1. Start Small: Test with a tiny amount to get familiar with gas fees and slippage.

2. Check Smart‑Contract Audits: Only use well‑audited platforms (Uniswap, PancakeSwap, etc.).

3.Use a Hardware Wallet or WalletConnect: Keep your seed phrase offline.

4.Monitor Gas Price

5. Double‑check contract addresses on official sources before swapping.