#CEXvsDEX101 #Centralized Exchanges (CEXs) such as Binance and Coinbase are operated by companies that act as intermediaries between buyers and sellers. They offer high liquidity, fast trade execution, and user-friendly platforms with features like fiat support and customer service. However, users must trust the exchange to securely hold their funds and data, which introduces counterparty risk. CEXs can also be subject to government regulations and potential hacks.

Decentralized Exchanges (DEXs) like Uniswap or dYdX operate on blockchain protocols without central authority. Users trade directly from their wallets, retaining full control of their assets. DEXs offer greater privacy, censorship resistance, and align with the core principles of decentralization. However, they often face lower liquidity, higher slippage, and require users to manage private keys and navigate complex interfaces.

Users usually prefer CEXs for large trades, fiat access, and ease of use. DEXs are ideal when seeking privacy, trading niche tokens, or avoiding centralized control, especially in DeFi or cross-chain environments.