First: What is a Centralized Exchange (CEX)?

These are platforms operated by companies or central entities. Some of the most famous examples:

Binance

Coinbase

Kraken

Advantages:

Easy to use.

Fast execution.

Technical support.

High liquidity.

Disadvantages:

Requires personal information (KYC).

The platform controls your funds (you don't own the keys = you don't own the coins).

Vulnerable to hacks or shutdowns by regulatory authorities.

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✅ Second: What is a Decentralized Exchange (DEX)?

These are platforms that operate directly on the blockchain without intermediaries. Some of the most famous examples:

Uniswap (Ethereum)

PancakeSwap (BNB Chain)

dYdX

Advantages:

No registration or KYC required.

Full control over your wallet (Non-custodial).

Cannot be easily shut down.

Disadvantages:

The interface may be complicated for beginners.

Gas fees (especially on Ethereum).

Less liquidity at times compared to centralized exchanges.

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📊 Quick comparison between CEX and DEX:

Criterion CEX DEX

Custody The platform holds your funds You hold your funds in your wallet

Identity (KYC) Required Not often required

Security More vulnerable to hacks Safer if you use your wallets correctly

Liquidity Higher Lower (depending on the platform and pair)

Control Limited for the user Full for the user

Fees Often lower Can be high (depending on the network)