On a DEX there is no central operator taking custody of your coins. You connect your own wallet and trade against smart contracts, so your assets stay under your control until the moment a swap executes. Most well-known DEXs use an automated market maker model, pricing trades from pools of assets that other users have supplied, rather than matching individual buyers and sellers through an order book.
The appeal is self-custody and openness. You do not hand your funds to a third party, you do not usually need to pass identity checks to trade, and any token with a liquidity pool can be listed permissionlessly. For someone who wants to avoid trusting a company with their coins, that is a genuine advantage.
The trade-offs are equally real. Because listing is open, a DEX can be full of low-quality or outright scam tokens, and there is no support line if you send funds to the wrong place or approve a malicious contract. You also still pay network gas fees, and thin pools can mean high slippage. A DEX gives you control and, with it, full responsibility. Approving a token for trading is a step to treat with care too, since a careless approval granted to a malicious contract is a common way funds are drained on-chain.
DeFi Basics and Risks
Key takeaways
- A DEX lets you trade crypto directly from your wallet via smart contracts, without a company taking custody.
- Most use automated market makers and liquidity pools rather than a traditional order book.
- Self-custody and open listing are strengths, but scam tokens, no support, gas fees and slippage are real risks.
Decentralised Exchange (DEX) — perguntas frequentes
How is a DEX different from a normal exchange?
A centralised exchange holds your funds and matches trades on its own systems, like a broker. A DEX never takes custody; you trade directly from your wallet against smart contracts, keeping control of your assets throughout.
Do I need to verify my identity on a DEX?
Usually not, because you trade from your own wallet rather than an account. That openness is convenient but also means there is no gatekeeper filtering out scam tokens or offering support if something goes wrong.
Related terms
Centralised Exchange (CEX)Automated Market Maker (AMM)Liquidity PoolSlippagedApp Todos os termos →New to crypto, or filling in the gaps? Work through the essentials in Learn, browse every term A–Z, or see live prices for the coins these concepts power.