#CEXvsDEX101

In the world of cryptocurrencies, there are two main types of trading platforms: centralized exchanges (CEX) and decentralized exchanges (DEX). Each has its advantages and disadvantages, and the best choice depends on the user's needs.

✅ What is a centralized exchange (CEX)?

These are platforms operated and managed by a specific company or entity, such as Binance or Coinbase. Users deposit their funds on the platform and trade through it.

Features:

Easy to use for beginners

High liquidity

Technical support available

Fast execution of trades

Disadvantages:

Need to trust the operating entity

Risk of hacking

Identity verification (KYC) is often required

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✅ What is a decentralized exchange (DEX)?

These are platforms that operate via smart contracts on blockchain networks, such as Uniswap and PancakeSwap. They are not controlled by a central party, and trading is done directly from the wallet.

Features:

Full control of funds (No custody)

Greater privacy (No need for KYC)

Censorship resistance

Disadvantages:

Can be complex for beginners

Lower liquidity at times

Risk of dealing with unaudited smart contracts