CEXvsDEX101
1) Centralized Exchanges (CEX)
Operated by companies like Binance, Coinbase, Kraken. They manage your account, custody funds, and require KYC/AML compliance .
Advantages
*User-friendly interfaces & customer support
*High liquidity → fast execution, low slippage
*Fiat on-ramps, plus advanced features (futures, margin, staking)
Disadvantages
Custodial risk (“not your keys, not your crypto”)
Vulnerable to hacks, regulatory frozen assets
Privacy compromised by KYC requirements
2) Decentralized Exchanges (DEX)
Operate via smart contracts (Uniswap, PancakeSwap, etc.), no central authority .
Advantages
*Non-custodial – you control private keys
*Privacy & no KYC
*Access to new or niche tokens early
*Censorship-resistant
Disadvantages
Lower liquidity → risk of slippage
*Depends on blockchain gas fees, may be slower
*Demands technical skill – wallet, contract checks, interface use
*Smart-contract and security risks
