✅ Master DEX vs CEX Trade-offs
Understand custody, trading mechanics, fees, and when to use each
Your Progress
0 / 5 completed🎯 Module Summary & Knowledge Check
You've explored the fundamental differences between decentralized and centralized exchanges. Here are the key insights:
🔐
DEX Advantages
- •Self-custody: You control private keys at all times
- •Privacy: No KYC, pseudonymous trading
- •Permissionless: Anyone can trade, create pools, list tokens
- •Transparency: All transactions visible on-chain
- •No counterparty risk: Can't freeze your account
🏦
CEX Advantages
- •Speed: Instant execution (~50ms vs 15-120s)
- •Fiat onramps: Buy crypto with USD/EUR/bank transfers
- •Deep liquidity: Professional market makers, minimal slippage
- •User-friendly: Familiar interface, customer support
- •Advanced features: Limit orders, stop losses, margin trading
⚖️
Security Models
DEX Risks:
- • Lost seed phrase = lost funds forever
- • Phishing and malicious approvals
- • Smart contract exploits (code bugs)
- • No customer support or recovery
CEX Risks:
- • Exchange hacks (Mt. Gox, FTX)
- • Insolvency and mismanagement
- • Account freezes and seizures
- • Regulatory exposure
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When to Use Each
Choose DEX:
- • Privacy and self-custody priority
- • Trading new/unlisted tokens
- • Small trades (if gas is low)
- • DeFi strategies (LP, yield farming)
Choose CEX:
- • Fiat conversions (USD → crypto)
- • Large trades (need deep liquidity)
- • Active/day trading (speed matters)
- • Advanced orders and features
🎓 Test Your Knowledge
Answer all questions to complete this module. Passing score: 3/5
1
What is the main custody difference between DEX and CEX?
2
Why do CEXs typically have deeper liquidity than DEXs?
3
What is an AMM (Automated Market Maker)?
4
When are DEX fees typically lower than CEX fees?
5