#CEXvsDEX101

If you are unsure whether to use a CEX or a DEX, here are the

Advantages and disadvantages of CEX and DEX

Centralized and decentralized exchanges are very different from each other.

Each has its advantages and disadvantages.

Here are the main ones:

1. Advantages and disadvantages of CEX

Advantages:

It is an easy-to-use exchange platform. The interfaces are easy to understand. That is, the degree of functionality is high.

High liquidity. Provides access to multiple investment and trading services, ensuring buy and sell orders.

Fast transaction exchange, almost in real-time.

Deposit of fiat currency (USD, EUR). This makes it easier for beginner traders to start their journey.

It has a high trading volume and a wide range of cryptocurrencies.

Disadvantages:

It can be hacked. Private keys can be lost on the exchange. It is not the most common, but certain million-dollar losses have occurred throughout history.

It is subject to governmental regulation: exchanges are controlled by external providers.

You must go through KYC and provide all your personal information.

2. Advantages and disadvantages of DEX

Advantages:

As I already mentioned in the comparative table, a DEX is free from regulations. That is, it is not controlled by the Government. This is undoubtedly one of its major advantages.

It is anonymous. You will only need to interact with a smart contract from your wallet to trade.

There is no exchange of personal data between the investor and the company, because there is no company behind it.

Its operations have low cost.

Allows users to access DeFi and NFTs. They also offer a wide variety of tokens.

Disadvantages:

Transactions tend to be slower. Each operation must be validated in a new block of the chain.

It has less liquidity than a CEX for moving large amounts. It is a new concept, not as well known as others. Therefore, it has fewer investors.