What is a DEX? How A Decentralized Exchange Works

Summary

Centralized exchanges (CEX) like Coinbase hold your funds. Decentralized exchanges (DEX) like Uniswap let you trade directly from your wallet. This video explains order books vs AMMs, the custody trade-off, and how DEXs fit into the DeFi ecosystem.

Key Concepts

Things To Remember

• On a DEX you keep custody of your assets — trades execute directly from your wallet.
• DEXs use AMMs instead of traditional order books.
• DEXs have no KYC requirements.
• DEX users are responsible for verifying token contract addresses to avoid scams.

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