GlossaryIntermediate
Decentralized Exchange
A trading platform where trades execute through code, without a central operator holding funds.
A decentralized exchange, or DEX, lets people trade cryptocurrencies directly through smart contracts, rather than depositing funds with a central company that matches and executes trades internally.
Because trades happen through code the user interacts with directly from their own wallet, a DEX generally doesn't take custody of a user's funds the way a centralized exchange does.
Examples
- Many decentralized exchanges use an automated market maker model instead of a traditional order book.
- Trading on a DEX requires connecting a self-custody wallet rather than creating an account with a deposit.