#CEXvsDEX101
Centralized Exchanges (CEX) and Decentralized Exchanges (DEX) represent different models for trading digital assets, each with its own advantages and disadvantages.
Centralized exchanges are managed by a single entity that oversees the trading operations, such as "Binance" and "Coinbase". Their main advantages include ease of use, high liquidity, and speed of order execution. They also provide technical support and user protection services. However, their disadvantages include the risk of hacking, as they store assets on centralized servers, in addition to the requirement for providing personal data (KYC), which may weaken privacy.
On the other hand, decentralized exchanges, such as "Uniswap" and "PancakeSwap", rely on smart contracts and allow users to trade without intermediaries. Their advantages include enhanced privacy, reduced risks of central hacking, and greater freedom in trading. However, they suffer from lower liquidity, relative difficulty in use, and sometimes high gas fees.
Centralized exchanges are preferred by beginners or those seeking ease and speed of execution, while decentralized exchanges are suitable for advanced users who prioritize privacy and full control over their assets.
