#CEXvsDEX101
A centralized exchange (CEX) is controlled by a singular group or entity, such as a privately held company or publicly traded corporation. The controlling entity is fully responsible for all aspects of the platform’s business.
A decentralized exchange (DEX) is governed by a technology protocol that enables a large group of people to participate in cryptocurrency exchange on a peer-to-peer basis. DEXs rely heavily on smart contracts as the “controlling entities” that determine how the decentralized exchange operates.
If you’re looking for the biggest selection of cryptocurrencies, then you’ll likely find it on a decentralized exchange. Users can buy nearly any digital token on decentralized exchanges, whereas centralized exchanges limit their offerings.
CEXs actively curate the cryptocurrencies they list, typically conducting extensive vetting to ensure that listed tokens meet specific quality standards. In contrast, the open architecture of decentralized exchanges enables nearly any token to be listed, without permission, provided that it meets the technical requirements of the exchange.
Centralized cryptocurrency exchanges typically support a variety of government-backed fiat currencies. Users can deposit, withdraw, and trade directly with currencies like the euro and U.S. dollar. Centralized exchanges make support for fiat money possible by establishing banking relationships with traditional financial institutions.
Want to use a decentralized exchange but don’t hold any digital tokens? You can first access a centralized exchange to trade your traditional money for crypto, and then use that crypto to begin trading on a DEX.
Centralized crypto exchanges are generally easy to use, while decentralized exchanges require some specialized knowledge to access. If you want your trading experience to feel friendly, then you’ll probably be most satisfied with a CEX.
by connecting your digital wallet.
