Cryptocurrency trading has grown significantly over the years, and traders have two primary options when it comes to exchanges: Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs). Each type of exchange has its own advantages, disadvantages, and use cases. This article explores the key differences between centralized and decentralized exchanges to help traders make informed decisions.
What is a Centralized Exchange (CEX)?
A Centralized Exchange (CEX) is a cryptocurrency trading platform that operates under a centralized authority. These exchanges act as intermediaries between buyers and sellers, handling order matching, liquidity, and security. Examples of popular centralized exchanges include Binance, Coinbase, and Kraken.
Pros of Centralized Exchanges:
High Liquidity – CEXs provide a deep order book,