#CEXvsDEX101 🏦 CEX (Centralized Exchange)

Examples: Binance, Coinbase, Kraken

How it Works:

Operated by a centralized company.

Requires user registration and identity verification (KYC).

User funds are held in the exchange's custody.

Pros:

✅ High liquidity

✅ Fast transactions

✅ Easy to use for beginners

✅ Fiat on-ramps (buy with USD, etc.)

Cons:

❌ Less privacy

❌ Potential risk of hacks

❌ Not fully controlled by the user

Coin Pair Example: BTC/USDT on Binance – Fast execution and deep liquidity.

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🔄 Dex (Decentralized Exchange)

Examples: Uniswap, Pancake swap, SushiSwap

How it Works:

Peer-to-peer trading on blockchain via smart contracts.

No central authority or KYC required.

User holds their own private keys and funds.

Pros:

✅ More privacy and control

✅ Permissionless access

✅ Often lower fees

Cons:

❌ Lower liquidity

❌ Slower transactions

❌ Risk of impermanent loss and rug pulls

Coin Pair Example: $PEPE / $ETH on Uniswap – Direct wallet-to-wallet trade using smart contracts.