#CEXvsDEX101

When trading cryptocurrencies, you’ll come across two main types of exchanges: Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs).

CEXs like Binance, Coinbase, and Kraken act as intermediaries. They manage users' funds, execute trades, and offer features like customer support, high liquidity, and fast transactions. However, they require you to trust the platform with your assets and personal data. This introduces risks like hacks, withdrawals being paused, or regulatory shutdowns.

DEXs such as Uniswap, PancakeSwap, and dYdX operate without intermediaries. They run on smart contracts, allowing users to trade directly from their wallets. DEXs offer greater privacy, control, and censorship resistance. However, they may have lower liquidity, higher slippage, and limited customer support. Some DEXs also lack advanced trading tools found on CEXs.

In short:

CEX = user-friendly, fast, custodial, less private

DEX = decentralized, private, non-custodial, but sometimes harder to use

Both have pros and cons. New traders may prefer the simplicity of CEXs, while experienced users may choose DEXs for greater control and decentralization.