Information
What Is a Decentralized Exchange (DEX)?
A decentralized exchange allows users to interact with blockchain-based trading mechanisms, often through self-custody wallets and smart contracts. Learn how a DEX differs from a centralized exchange.
How DEX trading works
DEX designs vary. Some use liquidity pools and automated market makers; others use different on-chain or hybrid mechanisms. Users typically authorize transactions with a wallet.
DEX and centralized exchange differences
Centralized platforms commonly manage accounts and may custody user assets. DEX users generally retain wallet control, but must manage keys, fees, approvals, and transaction risks themselves.
Trade-offs
DEXs can offer direct on-chain access, but may involve network fees, complex interfaces, liquidity limitations, smart-contract risk, and limited recovery options for mistakes.
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