#CEXvsDEX101
Centeralized and decentralised exchanges
Centralized and decentralized exchanges (CEXs and DEXs) are two different types of platforms for trading cryptocurrencies. Here’s a clear breakdown of their key features, differences, and pros and cons:
#centralized Exchanges (CEXs)
✅ Examples: Binance, Coinbase, Kraken, Bitfinex
🔧 How They Work:
Operated by a centralized company or organization.Users deposit their crypto or fiat into the exchange's wallets.The exchange manages order books and matches buyers with sellers.
#PrivateKeysMatter are held by the exchange.
✅ Pros:
#high liquidity – More users and trading pairs.
User-friendly – Easier for beginners.
Fast transactions – Trades are executed quickly.
Customer support – Available if users have issues.
❌ Cons:
Custodial risk – Users don’t control their funds.
Security vulnerabilities – Can be hacked (e.g., Mt. Gox).
Regulatory risk – Can be shut down or restricted by governments.
🔹#DecentralizedTrading Exchanges (DEXs)
✅ Examples: Uniswap, SushiSwap, PancakeSwap, dYdX
🔧 How They Work:
Operate without a central authority.Use smart contracts to facilitate peer-to-peer trading.Users keep control of their private keys and funds.Trades are made directly from wallets via blockchain.
✅ Pros:
Full control of funds – No need to trust a third party.Greater privacy – Usually no KYC (Know Your Customer).Resistant to censorship – Harder to shut down.Transparent – Code and operations are often open-source.
❌ Cons:
Lower liquidity – Especially for smaller tokens.
Slower trades – Limited by blockchain speed.
More complex – Less intuitive for beginners.
No customer support – You're on your own if you make a mistake.