#CEXvsDEX101 $BTC CEXs (Centralized Exchanges):

Centralized Control:

A company or entity manages the platform and user assets.

Custodial Service:

Users typically deposit their crypto assets into CEX wallets, which are controlled by the exchange.

High Liquidity:

CEXs generally offer more liquidity due to their larger user base and user-friendly interfaces.

Regulation and KYC/AML:

CEXs are often subject to financial regulations, requiring Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.

Convenience and User-Friendliness:

CEXs are generally considered more user-friendly with intuitive interfaces and customer support.

Fiat On-ramps:

CEXs usually offer fiat on-ramps, allowing users to deposit and withdraw fiat currencies.

DEXs (Decentralized Exchanges):

Decentralized Control:

DEXs operate using smart contracts and do not have a central entity controlling the platform.

Non-Custodial:

Users retain control of their private keys and assets within their own wallets.

Lower Fees:

DEXs often have lower trading fees, but users need to pay network fees (gas fees).

Enhanced Privacy:

DEXs generally offer greater privacy as they often don't require KYC/AML procedures.

Potential for Rug Pulls:

DEXs might be vulnerable to rug pulls as tokens are not always audited before listing.

Limited Liquidity:

DEXs may have lower liquidity than CEXs due to their reliance on user-provided liquidity.

Steeper Learning Curve:

DEXs can be more complex for beginners as they require knowledge of wallets, private keys, and smart contracts.