🤔Understanding CEXs and DEXs

Cryptocurrency exchanges come in two main types: Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs). Both allow you to trade crypto, but they differ in how they operate and how much control they give you over your funds.

• CEXs (e.g., Coinbase, Binance) are managed by companies that oversee the platform and hold custody of your assets. They’re beginner-friendly, offer fiat on-ramps, and handle security for users. However, users rely on the exchange’s security and custodianship.

• DEXs (e.g., Uniswap, Raydium) run on blockchain networks without a central authority. You trade directly from your wallet, maintaining full control over your assets and privacy. DEXs often list new tokens early, though they can be less intuitive for beginners.

Key Differences

Feature	CEX	DEX
Custody of Funds	Held by exchange	Held by user
Account Requirement	Yes (usually with KYC)	No (trade directly from your wallet)
Control Over Assets	Limited, as exchange manages private keys	Full control, as users manage their own keys
Token Availability	Typically established tokens	Wide range, including new/experimental tokens
Fiat On-Ramps	Yes, can deposit and withdraw fiat	No, requires crypto for trades

In summary, CEXs offer convenience and security, while DEXs provide more control and privacy. Most people use a combination of both: CEXs for fiat on- and off-ramps and DEXs for token trading.