#CEXvsDEX101
#CEXvsDEX101 – Centralized vs. Decentralized Exchanges
Here's a quick breakdown to help you understand the key differences between Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs):
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🔒 Centralized Exchanges (CEXs)
Examples: Binance, Coinbase, Kraken
How it works: You deposit your crypto into the exchange’s custody. The platform handles your trading, matching buyers and sellers through its own order book.
Pros:
🧑💼 User-friendly (good for beginners)
⚡ Fast transactions
📞 Customer support available
💳 Fiat on-ramps (buy crypto with credit cards or bank transfers)
Cons:
🔐 You don’t control your private keys (custodial)
🚨 Prone to hacks & regulatory pressure
❌ Potential withdrawal limits or account freezes
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🛠️ Decentralized Exchanges (DEXs)
Examples: Uniswap, SushiSwap, PancakeSwap
How it works: Trades occur peer-to-peer via smart contracts on a blockchain. You connect your wallet (like MetaMask) and keep control of your funds.
Pros:
🔑 You control your keys (non-custodial)
🌍 Permissionless and open 24/7
📉 Often lower trading fees
🕵️♂️ More privacy
Cons:
📉 Slower and sometimes more expensive (due to gas fees)
👨💻 Steeper learning curve
🐳 Risk of impermanent loss and rug pulls in low-liquidity pools
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🤔 Which Should You Use?
New to crypto? Start with a CEX for ease of use.
Value privacy and control? Use a DEX once you're comfortable.
Long-term? Many users diversify—using both depending on their needs.
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