In this article, we will compare CEX vs DEX for you. We will explain what CEX and DEX mean.
CEX stands for (Centralized Exchange), that is, a decentralized exchange with a certain center. (DEX) is a marketplace for cryptocurrencies or Blockchain investments that is completely open source.
CEX vs DEX
CEX stands for (Centralized Exchange), that is, exchanges with a centralized administration. Listing cryptocurrencies on these exchanges, in which parities they will be listed, and making decisions about crypto money users are determined by a management.
Binance, Kucoin, Huobi are well-known decentralized exchanges.
A decentralized exchange (DEX) is a marketplace for cryptocurrencies or Blockchain investments that is completely open source. The decentralized exchange offers its users a way to buy and sell cryptocurrencies or other blockchain-based assets without a central institution or intermediary. Nobody is in control in DEX. Buyers and peers negotiate with each other one-on-one through peer-to-peer (P25) trading applications.
The simplest way to understand DEX: make your own trade. You make transactions and keep money or assets in your own account. The biggest advantage of this system is that you don’t entrust your money to a trading company or any other third party.
In a DEX, account information is not shared with the exchange operator. Therefore, it is more resistant to attacks and manipulations than a centralized exchange. Instead, funds may be held in your account and you will be the only person with access to your account. It has a higher degree of confidentiality as you do not share your data with the exchange operator.
While there are difficulties such as withdrawal and deposit limits in CEXs, that is, centralized exchanges, KYC (identity verification) requirement after a certain transaction limit, stopping deposits and withdrawals from time to time; DEXs have no such limitations.
A DEX can be much more expensive than a centralized exchange. Because when you make a trade, you may need to buy Ethereum Gas (Ethereum services). This means that a trade on a decentralized cryptocurrency exchange can sometimes be more costly than a trade on a centralized cryptocurrency exchange.
Decentralized cryptocurrency exchanges that have attracted attention in recent years; Binance DEX, Uniswap.
Unless you are trading ICO tokens or buying large amounts of cryptocurrency, there is little or no advantage in using the DEX. Typically, someone who needs to buy a large amount of cryptocurrencies turns to DEXs.
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