CEX vs DEX: What Is the Difference?

A centralized exchange (CEX) is run by a company. You deposit funds into an account and the exchange holds them for you while you trade. A decentralized exchange (DEX) runs on smart contracts. You trade from your own wallet and keep control of your keys.

Main differences

	CEX	DEX
Custody	The exchange holds your funds	You keep your funds in your wallet
Sign-up	Account, usually with identity checks (KYC)	Connect a wallet
Fiat deposits	Often card, bank transfer and other methods	Usually crypto only
Fees	Trading fees set by the exchange	Protocol fees plus network (gas) fees
Main risks	Company failure, hacks, account freezes	Smart contract bugs, wallet mistakes, scam tokens

Neither is risk-free. Many traders use both: a CEX for fiat deposits and a DEX for on-chain assets.

Frequently asked questions

Is a DEX safer than a CEX?

A DEX removes the risk of an exchange holding your funds, but adds smart contract and wallet risks. A regulated CEX has legal obligations but holds your assets.

Do DEXs require KYC?

Most DEX protocols do not ask for identity verification, but the website or front end you use may block some countries.

Are DEX fees lower?

Trading fees on perpetual DEXs can be competitive, but you also pay network (gas) fees on some chains.