What is the difference between a centralized and decentralized exchange?
A centralized exchange (CEX) is run by a company that holds your funds and manages accounts. A decentralized exchange (DEX) lets you trade directly from your own wallet through smart contracts, with no custodian.
Centralized (CEX)
Easier for beginners: familiar logins, customer support, and fiat on-ramps. The trade-off is that the company holds your funds and your keys.
Decentralized (DEX)
You trade from your own wallet; no company holds your funds. More control and privacy, but mistakes (wrong approvals, wrong tokens) are entirely yours to bear.
The choice determines who holds your funds and who absorbs mistakes — a core risk decision, not just a convenience one.
A CEX is a staffed bank branch; a DEX is a self-service machine with no clerk to call if something goes wrong.
- CEX: custody and solvency risk sit with the platform.
- DEX: malicious tokens and bad approvals can drain a wallet.
- DEX transactions are irreversible and unsupported by any help desk.
Practice verification in the Wallet Simulator
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Last reviewed 2026-06-25. This topic can change over time; always confirm current specifics from primary sources.