Different Types Of Exchanges In Crypto
What is the meaning of exchanges in the crypto world?
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đź•’ 10:36 AM
đź“… Aug 26, 2025
✍️ By Naftal
There are two main flavors:
1. Centralized Exchanges (CEXs)
Run by a company (like Binance, Coinbase, Kraken).
You deposit your crypto or fiat (USD, KES, etc.), and the exchange manages custody.
Feels like using a bank app—super user-friendly.
Pros: high liquidity, easy-to-use, fast trades.
Cons: “Not your keys, not your coins.” If the exchange freezes or gets hacked, you could lose funds.
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2. Decentralized Exchanges (DEXs)
Run on smart contracts (no company, just code). Examples: Uniswap, PancakeSwap, dYdX.
You trade directly from your wallet (MetaMask, Phantom, etc.)—no middleman.
Powered by liquidity pools instead of order books.
Pros: more control, anonymous, no KYC usually.
Cons: riskier if you don’t know what you’re doing (rug pulls, low liquidity, fake tokens).
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👉 In short:
CEX = crypto’s Wall Street (convenient but centralized).
DEX = crypto’s wild west (freedom but DYOR or get rekt).