Centralized exchanges (CEX) are operated by a central institution, requiring users to entrust their assets to the platform. They offer fast transaction speeds and high liquidity, such as Binance and Huobi. However, they carry risks such as asset theft and market manipulation.

Decentralized exchanges (DEX) are based on blockchain technology, allowing users to control their private keys and assets, with transactions completed on-chain, such as Uniswap and PancakeSwap. While they are more secure and transparent, they tend to have slower transaction speeds and limited liquidity.

Both types have their pros and cons; centralized exchanges are suitable for beginners and high-frequency trading, while decentralized exchanges cater to users who prioritize privacy and asset control. In the future, there may be a trend towards integration, leading to a hybrid trading model.