Decentralized Exchange(DEX)
A cryptocurrency exchange that operates through smart contracts without a central authority or custody of user funds.
In-Depth Explanation
DEXs enable peer-to-peer trading without intermediaries. AMM-based DEXs (Uniswap, Curve) use liquidity pools; order book DEXs (dYdX) match buyers and sellers directly. DEXs offer self-custody and permissionless access but may have higher slippage and gas costs than centralized exchanges.
Related Terms
Automated Market Maker
AMMA smart contract that provides liquidity and enables trading using a mathematical formula instead of an order book.
Liquidity Pool
LPA smart contract holding paired assets that enables trading, lending, or other DeFi activities.
Slippage
The difference between the expected price of a trade and the actual executed price.
Centralized Exchange
CEXA cryptocurrency exchange operated by a company that holds custody of user funds and maintains order books.
More in DeFi Primitives
View all →Automated Market Maker
AMMA smart contract that provides liquidity and enables trading using a mathematical formula instead of an order book.
Liquidity Pool
LPA smart contract holding paired assets that enables trading, lending, or other DeFi activities.
Collateralized Debt Position
CDPA loan where users deposit collateral to mint or borrow assets, with liquidation risk if collateral value falls.
Lending Protocol
A DeFi application that matches lenders with borrowers through smart contracts, enabling permissionless borrowing and lending.