#CEXvsDEX101 which is better, decentralized exchanges or exchanges like Binance, where you trust the exchange to hold your funds? When trading on a DEX, you do not hold funds on that exchange; they remain in your wallet, you just need to connect it to the exchange.

**Centralized exchanges (CEX)**, such as Binance and Coinbase, are managed by companies and require identity verification (KYC). They offer high liquidity, a user-friendly interface, and support for fiat, but they store users' funds in their wallets, which increases the risk of hacks.

**Decentralized exchanges (DEX)**, such as Uniswap and PancakeSwap, operate on the blockchain through smart contracts. They do not require KYC and allow trading directly from your wallet, ensuring anonymity and security. However, DEXs often have lower liquidity and are more complex for beginners.

**The choice depends on your goals:** CEX is suitable for quick trading with fiat, while DEX is for anonymity and decentralization. The ideal option is to use both types, considering their advantages and disadvantages.