A DEX (Decentralized Exchange) lets you swap cryptocurrencies directly from your own wallet, without depositing funds on the platform: trades are executed through smart contracts that use liquidity pools instead of an order book managed by a company.
Advantages over a CEX
- You never hand custody of your funds to a third party ("not your keys, not your coins").
- No registration or identity verification is required to trade.
- Any token can be listed without needing the platform's approval.
Drawbacks
- Network fees (gas) can be higher and more variable than on a CEX, depending on blockchain congestion.
- The user experience is more complex: you're responsible for managing your own wallet and its keys.
- Since it doesn't require identity verification, it also doesn't offer the same legal protections as a regulated platform.
Well-known examples
Uniswap, Curve, and PancakeSwap are among the most widely used DEXs, each built on a different blockchain (Ethereum, BNB Chain, among others).