Glossary · D
DEX (Decentralised Exchange)
A cryptocurrency exchange that operates through smart contracts without a central authority holding user funds. Users trade directly from their self-custodial wallets. Uniswap, Curve, and Balancer are leading DEXs. Unlike centralised exchanges (CEXs), DEXs require no account registration or identity verification.
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How DEX works in practice
A DEX lets users trade directly from their own wallets against smart contracts, with no custody and no account. Most use an AMM; some run on-chain order books where throughput allows.
Worked example
Swapping on a DEX means signing a transaction from your wallet. The assets never leave your control except in the swap itself, so exchange insolvency is not a risk that applies.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Self-custody moves the risk rather than removing it. A public mempool exposes trades to sandwiching, and permissionless listing means the interface will happily show you a token that exists only to be sold to you.
DEX: common questions
- What is DEX?
- A cryptocurrency exchange that operates through smart contracts without a central authority holding user funds. Users trade directly from their self-custodial wallets. Uniswap, Curve, and Balancer are leading DEXs. Unlike centralised exchanges (CEXs), DEXs require no account registration or identity verification.
- How does DEX work in practice?
- A DEX lets users trade directly from their own wallets against smart contracts, with no custody and no account. Most use an AMM; some run on-chain order books where throughput allows.
- Can you give an example of DEX?
- Swapping on a DEX means signing a transaction from your wallet. The assets never leave your control except in the swap itself, so exchange insolvency is not a risk that applies.
- What do people get wrong about DEX?
- Self-custody moves the risk rather than removing it. A public mempool exposes trades to sandwiching, and permissionless listing means the interface will happily show you a token that exists only to be sold to you.