#CEXvsDEX101 CEX vs DEX 101 – Here's a basic primer on Centralized Exchanges (CEXs) vs Decentralized Exchanges (DEXs) in crypto:
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🔷 What is a CEX (Centralized Exchange)?
Examples: Binance, Coinbase, Kraken, Bybit
Definition: A centralized platform run by a company that matches buyers and sellers of crypto.
✅ Pros:
User-friendly: Easy for beginners.
High liquidity: Fast trading with minimal slippage.
Fiat support: Buy crypto with USD, EUR, etc.
Customer support: Assistance if something goes wrong.
❌ Cons:
Custodial: They control your crypto ("not your keys, not your coins").
KYC/AML: Identity verification usually required.
Security risk: Target for hacks due to centralized control.
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🔷 What is a DEX (Decentralized Exchange)?
Examples: Uniswap, PancakeSwap, dYdX, GMX
Definition: A non-custodial platform that uses smart contracts to let users trade directly from their wallets.
✅ Pros:
Non-custodial: You control your funds (wallet-to-wallet).
Privacy: Usually no KYC.
Open & permissionless: Anyone can use it.
Access to new tokens: Early-stage or obscure tokens often launch here first.
❌ Cons:
Less user-friendly: Requires basic crypto knowledge.
Lower liquidity: Especially for small tokens.
Gas fees: You pay for transactions on-chain.
No customer support: You're on your own if you mess up.
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🔁 Summary Table:
Feature CEX DEX
Custody Exchange holds your funds You hold your funds
KYC Required Usually Yes Usually No
Speed Fast Depends on network
Security Risk Higher (target for hackers) Lower (you control funds)
Token Access Limited Broad, including new tokens
Fiat On-Ramp Yes No (usually crypto-only)
