DEX and CEX: Outstanding Differences ?

[CryptoHolic]

In the vibrant cryptocurrency market, besides traditional centralized exchanges (CEX), DEX (Decentralized Exchange) is gradually asserting its position and attracting the attention of many investors. This article will compare DEX and CEX on four important aspects: asset control, transparency, authentication, anonymity, and transactions.

1. Right to Control Assets:

DEX: The highlight of DEX is complete autonomy in asset management. Users store private keys on personal wallets, independent of any third party. This helps minimize the risk of loss or theft of assets due to the exchange being hacked or scammed.
CEX: In contrast to DEX, CEX requires users to deposit funds to the exchange and hand over control to the intermediary. This poses potential risks if the exchange has security problems or market manipulation.
2. Clarity and Authenticity:

DEX: DEX operations are based on open source code, all transactions are recorded and transparent on the blockchain. Users can look up and verify transaction information themselves, ensuring accuracy and transparency.
CEX: CEX operations are often less transparent. Accessing transaction data and checking the source of information may face many limitations.
3. Anonymity:

DEX: DEX respects user privacy. Account creation and transactions typically do not require providing personal information, helping to protect users' identities.
CEX: Requires identity verification (KYC) and personal information to comply with anti-money laundering (AML) regulations. This may make some users concerned about privacy.
4. Transaction:

DEX: DEX supports direct peer-to-peer transactions between users. Order matching takes place automatically through AMM models or decentralized order books.
CEX: CEX acts as a broker, connecting buyers and sellers to execute transactions. Order matching takes place on a traditional order book.
Conclude:

DEX and CEX both have their own advantages and disadvantages. Choosing the right trading platform depends on each individual's needs and investment goals.

DEX is the right choice for investors who respect privacy, promote transparency and have complete autonomy in asset management. However, be aware of high price volatility, low liquidity, and a more complicated user interface compared to CEX.

CEX is suitable for beginner investors, emphasizing convenience and high liquidity. However, it is important to be aware of the security risks and transparency of the exchange.

Reference: sàn dex là gì