Decentralized Exchanges

Exchanges solve a simple user need: turn one asset into another. The big difference is whether the platform takes custody and matches trades internally, or whether settlement happens directly on-chain.

Centralized exchanges often feel familiar because they resemble modern trading apps. Decentralized exchanges feel more native to crypto because the wallet stays in the loop.

In practice, many users move between both. They may buy crypto on a CEX for convenience, then withdraw to a wallet to use DeFi protocols.

The deeper lesson is that a DEX is not just an exchange website. It is a settlement mechanism embedded in smart contracts, which is why liquidity and pricing work differently there.