A Decentralized Exchange (DEX) is a type of cryptocurrency exchange that operates without a central authority, enabling peer-to-peer trading of digital assets directly between users. DEXs utilize smart contracts on blockchain networks to facilitate transactions, ensuring that trades are executed transparently and securely without the need for intermediaries. This decentralization offers several advantages, including enhanced privacy, reduced risk of hacking and fraud, and greater control over one's assets. Users retain custody of their funds throughout the trading process, unlike centralized exchanges where funds are held by the exchange. Popular DEX platforms include Uniswap, SushiSwap, and PancakeSwap, each offering various features such as liquidity pools, yield farming, and staking. By eliminating the need for central intermediaries, DEXs aim to create a more open and inclusive financial ecosystem.
