A Decentralized Exchange (DEX) is a platform that allows users to trade cryptocurrencies directly with each other without the need for a third party to facilitate the transaction. Unlike traditional exchanges, which are centralized and rely on a central authority to process trades, DEXs operate on a peer-to-peer network system.
In a DEX, traders retain control of their funds at all times, as transactions occur directly between their digital wallets. This decentralization of control reduces the risk of hacking and eliminates the need to trust a third party to safeguard funds. Additionally, DEXs typically offer greater privacy and security due to their peer-to-peer nature.
DEXs have gained popularity in recent years due to their alignment with the core principles of cryptocurrency – decentralization, security, and privacy. By enabling direct trades between users without the need for a central authority, DEXs promote financial autonomy and empower individuals to take control of their assets in the digital economy.
