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CEX vs DEX: What Should You Trade on?

CEX vs DEX: What Should You Trade on?

What is CEX?

What is DEX?

Difference between CEX & DEX

  1. CEXs require your full trust as buyers and sellers. They handle the overall trading process, so you as a customer need to put your full trust in the exchange platform.
  2. DEXs, on the other hand, have no third party controlling your trading process. Instead, DEXs provide a platform for buyers and sellers to meet and perform the trade according to their choices.
  3. CEXs make trading more convenient and fast. You can sign up and deposit funds in minutes, which is usually very straightforward. This is because the process does not take place on the blockchain network. There is no need for in-real-time updates to the network nodes.
  4. With DEXs, you need to invest some time before doing trading. DEX’s system is more complicated compared to CEX. You also have to transfer funds to a wallet and connect your wallet to the decentralized exchange.
  5. CEXs have a lot of legal requirements since they are a centralized platform and come under government governance. For example, KYC is essential to prove your identity for security purposes.
  6. Laws and regulations do not completely bind DEXs as they are decentralized and are made to keep third parties such as governments out of transactions, directly connecting buyers and sellers no matter where they are.
  7. CEXs requires that you upload and store your personal information on the exchange platform when you deposit your money.
  8. DEXs do not require your personal information. They provide anonymity, and transactions are made through a digital wallet that stores your assets and is unique to you.
  9. The transaction fees for CEXs are usually fixed at a specific amount and are considerably cheaper.
  10. DEXs transaction fees are, most of the time, relatively higher compared to CEX.
  11. CEX is more user-friendly and easy to use as all transactions occur on one platform.
  12. DEX platforms can be a bit complex and require that you know how the platform works.

Which one to use for executing trades



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