#CEXvsDEX101

🏦 Centralized Exchanges (CEX)

Operated by companies like Binance, Coinbase, Kraken. They manage your account, custody funds, and require KYC/AML compliance .

Pros:

User-friendly interfaces & customer support

High liquidity → fast execution, low slippage

Fiat on-ramps, plus advanced features (futures, margin, staking)

Cons:

Custodial risk (“not your keys, not your crypto”)

Vulnerable to hacks, regulatory frozen assets

Privacy compromised by KYC requirements

---

🧬 Decentralized Exchanges (DEX)

Operate via smart contracts (Uniswap, PancakeSwap, etc.), no central authority .

Pros:

Non-custodial – you control private keys

Privacy & no KYC

Access to new or niche tokens early

Censorship-resistant

Cons:

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