CEX vs DEX 101: A Quick Comparison
Centralized Exchanges (CEX):
* Definition: Operated by a company, acting as an intermediary (e.g., Binance, Coinbase).
* Pros: Easy to use, high liquidity, fiat support, customer service, advanced trading features.
* Cons: Custodial risk (you don't hold keys), KYC/AML required (less privacy), central point of failure.
* Best for: Beginners, large trades, fiat conversions, users prioritizing convenience and support.
Decentralized Exchanges (DEX):
* Definition: Peer-to-peer trading directly on a blockchain via smart contracts (e.g., Uniswap, PancakeSwap).
* Pros: Self-custody (you hold your keys), often no KYC (more privacy), permissionless access to many tokens, censorship-resistant.
* Cons: Can be less user-friendly, potentially lower liquidity, gas fees, smart contract risks.
* Best for: Users prioritizing self-custody and privacy, exploring new tokens, experienced crypto users.
In Short: CEX offers convenience and features at the cost of control, while DEX offers control and privacy at the cost of simplicity and potential transaction fees.