#CEXvsDEX101 The core difference between CEXs and DEXs lies in their fundamental structure and how they manage your cryptocurrency assets.

Centralized Exchanges (CEXs):

* Intermediary: Operated by a central company (e.g., Binance, Coinbase).

* Custodial: The exchange holds your funds and private keys. "Not your keys, not your coins."

* KYC/AML: Typically require identity verification (Know Your Customer/Anti-Money Laundering).

* Fiat On/Off-Ramps: Allow direct conversion between traditional currencies (USD, EUR) and crypto.

* Pros: User-friendly, high liquidity, good customer support, advanced trading features.

* Cons: Custodial risk (funds at risk if hacked/bankrupt), less private, subject to censorship/regulation.

Decentralized Exchanges (DEXs):

* Peer-to-Peer: Facilitate direct trading between users via smart contracts on a blockchain. No central company.

* Non-Custodial: You retain full control of your private keys and funds at all times.

* No KYC: Generally do not require identity verification, offering greater privacy.

* Crypto-to-Crypto Only: Primarily for trading crypto for other crypto; no direct fiat support.

* Pros: Self-custody (reduced risk of hacks/insolvency), censorship-resistant, private, early access to new tokens.

* Cons: Steeper learning curve, potentially lower liquidity for niche tokens, variable network "gas" fees, no direct customer support.

In essence, CEXs prioritize ease of use and accessibility, while DEXs prioritize decentralization, self-custody, and privacy. Many crypto users utilize both, leveraging CEXs for initial fiat deposits and withdrawals, and DEXs for more direct, self-managed crypto-to-crypto trading.