🏬 DEX vs CEX: Custody & Control
Compare decentralized exchanges like Uniswap vs Coinbase & Binance
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0 / 5 completed🔄 DEX vs CEX: Understanding the Difference
Choosing between decentralized (DEX) and centralized (CEX) exchanges is one of the most important decisions in crypto. Each offers different trade-offs between convenience, security, and control.
🎮 Interactive: Exchange Type Explorer
Compare the fundamental differences between DEXs and CEXs:
DEX (Decentralized Exchange)
Non-custodial trading protocols that operate via smart contracts without intermediaries
Popular Examples
✓ Advantages
- • Self-custody of funds (you own your keys)
- • No KYC required (pseudonymous)
- • Permissionless and censorship-resistant
- • Transparent on-chain activity
- • No counterparty risk
- • Trade any token instantly
✗ Disadvantages
- • Higher transaction fees (gas costs)
- • Slower execution (block confirmation)
- • Complex UX for beginners
- • Smart contract risks
- • Limited order types
- • Impermanent loss for LPs
The Fundamental Trade-Off
Custody Model
DEX: You control private keys. Funds stay in your wallet. Trade directly from your custody.
CEX: Exchange holds your funds. You have an account balance. They control the keys.
Speed vs Control
DEX: Slower (15s-2min block confirmation) but you maintain complete control.
CEX: Instant trades but you trust the exchange with custody.
Fee Structure
DEX: Gas fees ($5-$50 on Ethereum) plus swap fees (0.3% typical).
CEX: Trading fees only (0.1-0.2%), no gas costs.
Access & Restrictions
DEX: Open to anyone worldwide. No account needed. Pseudonymous.
CEX: KYC required. Geographic restrictions. Account-based.
Why Both Exist
DEXs and CEXs serve different needs and users. Many experienced traders use both:
- •Use CEX for: Fiat on-ramps, day trading, advanced orders, large volumes
- •Use DEX for: New tokens, privacy, self-custody, avoiding KYC, DeFi strategies
The choice isn't binary—it's about using the right tool for each situation.