CEX vs DEX — Centralized vs Decentralized Exchanges
Which should you use? The tradeoffs between Binance/Bybit and Uniswap/dYdX in plain terms.
| Feature | CEX | DEX |
|---|---|---|
| Examples | Binance, Bybit, Coinbase, OKX, Kraken | Uniswap, dYdX, Curve, Jupiter (SOL) |
| Custody | Exchange holds your funds | You hold your own keys |
| KYC required | ✅ Usually required | ❌ Usually none |
| Fees | 0.02–0.10% maker/taker | 0.01–1% (AMM pool) |
| Liquidity (majors) | Very high (order book) | Medium (AMM slippage) |
| Leverage/Futures | ✅ Up to 100x | ✅ dYdX, GMX (limited) |
| Long-tail tokens | Limited listings | Anything with a pool |
| Hack risk | Exchange hack = total loss | Smart contract risk |
| Fiat on/off ramp | ✅ Easy | ❌ Difficult |
| Censorship risk | Account can be frozen | Permissionless |
Use CEX when:
- Buying crypto with fiat (credit card, bank)
- Trading large size with order book depth
- Leveraged perpetuals and futures
- You want customer support / account recovery
Use DEX when:
- Trading new/obscure tokens before CEX listing
- Providing liquidity to earn fees (LP)
- Privacy — no KYC or identity link
- Avoiding exchange hacks with self-custody