#CEXvsDEX101

Cryptocurrency trading depends on two main types of exchanges: centralized exchanges (CEX) and decentralized exchanges (DEX). Each has its advantages and disadvantages, making them suitable for different trading needs.

**CEX** operates like a traditional financial institution, where users deposit funds and trade through an intermediary. Examples include Binance, Coinbase, and Kraken. CEXs offer high liquidity, user-friendly interfaces, and customer support, but they require users to trust the platform with their assets.

**DEX**, on the other hand, eliminates intermediaries by using smart contracts on blockchain networks. Platforms like Uniswap and PancakeSwap allow users to trade directly from their wallets, enhancing security and privacy. However, DEXs often suffer from lower liquidity, complex interfaces, and higher transaction fees.

The choice between CEX and DEX depends on priorities: security and decentralization favor DEX, while convenience and liquidity favor CEX. Understanding both is important for effectively navigating the crypto landscape.