#CEXvsDEX101 #CEXvsDEX101: Centralized and Decentralized Exchanges

Centralized Exchanges (CEX)

Centralized exchanges are traditional exchanges that operate on a centralized system, where all transactions are managed by a third party. Examples of centralized exchanges include:

- Binance

- Coinbase

- Kraken

Decentralized Exchanges (DEX)

Decentralized exchanges operate on a decentralized system, where transactions are executed directly between users without the need for a third party. Examples of decentralized exchanges include:

- Uniswap

- SushiSwap

- PancakeSwap

Key Differences Between CEX and DEX

1. *Centralization vs. Decentralization*: Centralized exchanges operate on a centralized system, while decentralized exchanges operate on a decentralized system.

2. *Security*: Centralized exchanges are usually more secure due to the presence of a third party responsible for managing funds.

3. *Privacy*: Decentralized exchanges provide greater privacy for users, as their personal information is not stored.

4. *Fees*: Decentralized exchanges are usually less expensive than centralized exchanges.

5. *Liquidity*: Centralized exchanges are usually more liquid than decentralized exchanges.