#CEXvsDEX101 CEX vs DEX 101: Understanding the Difference 🔍
In the world of crypto trading, two major platforms dominate: Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs). Let’s dive a bit deeper:
🔵 CEX (Centralized Exchange)
Examples: Binance, Coinbase, Kraken
How it works: Operated by a company that acts as a middleman between buyers and sellers.
User Experience: User-friendly interfaces, advanced trading features, customer support.
Liquidity: Generally higher due to large user bases.
Speed: Fast trade execution.
Security: Company secures funds (but prone to hacks if compromised).
KYC/AML: Mandatory — users must verify identity.
Control: You don’t fully control your private keys ("Not your keys, not your coins").
🟢 DEX (Decentralized Exchange)
Examples: Uniswap, PancakeSwap, SushiSwap
How it works: Peer-to-peer trading using smart contracts, no intermediaries.
User Experience: Requires some crypto knowledge, wallet connection needed (e.g. MetaMask).
Liquidity: Can be lower for some tokens; depends on liquidity pools.
Speed: Slower during network congestion.
Security: Non-custodial — you control your private keys.
KYC/AML: Usually none, offering greater privacy.
Risk: Smart contract vulnerabilities, impermanent loss in liquidity providing.
🔄 Summary
Feature CEX DEX
Control of funds Exchange User
Privacy Low High
KYC Yes Rare
Security Centralized risk Smart contract risk
Ease of use Beginner-friendly Requires knowledge
