What is a decentralized exchange (DEX)?

A decentralized exchange (or DEX) is a peer-to-peer marketplace where transactions occur directly between crypto traders. DEXs fulfill one of crypto’s core possibilities: fostering financial transactions that aren’t officiated by banks, brokers, or any other intermediary. Many popular DEXs, like Uniswap and Sushiwap, run on the Ethereum blockchain.

How do decentralized crypto exchanges work?

How Decentralized Crypto Exchanges Work DEXs charge users much lower fees than their centralized counterparts, but can be much more difficult to navigate and use. Decentralized crypto exchanges (DEXs) are blockchain -based apps that coordinate large-scale trading of crypto assets between many users.

What is the trade-off between dexs and cexs?

Another part of the trade-off between DEXs and CEXs comes down to whether users would rather hold their own crypto directly or entrust it to the exchange. CEXs typically require that users place assets in their custody before trading. Holding your assets yourself keeps to the ideal of self-reliance that permeates the crypto sector.

What are the disadvantages of a decentralized exchange?

The main drawback for some: you're responsible for your own security. A decentralized exchange or DEX is a place where people can go to trade cryptocurrencies without an intermediary. To better identify what a decentralized exchange is, it’s important to first understand how centralized exchanges work.