##CEXvsDEX101 What are Decentralized Exchanges (DEX)?

On the other hand, decentralized exchanges allow users to trade cryptocurrencies directly with each other. This model eliminates the need for a central authority and promotes greater privacy and control. DEXs operate on blockchain technology and use smart contracts, enabling peer-to-peer transactions.

Pros and Cons of DEXs

The benefits of DEXs are appealing. They do not require personal information, allowing for more anonymous trading. You also maintain control of your funds, which reduces the risk of losing them due to exchange failures. DEXs can be more globally accessible, as they often do not require extensive identity verification.

That said, DEXs can be quite complex for beginners. They may not support fiat transactions, making it difficult to buy crypto without already owning some. And lower trading volumes can lead to price volatility.