DEX, short for Decentralized Exchange, marks a significant innovation in cryptocurrency trading. Unlike traditional centralised exchanges (CEX), DEXs operate without an intermediary or controlling company, relying entirely on smart contracts and algorithms to manage transactions and exchanges.

The defining feature of DEXs is their decentralised nature. They allow users to conduct trades directly with one another (peer-to-peer), using blockchain technology to ensure transparency, security, and immutability. This approach eliminates the need for a central entity overseeing and facilitating transactions, reducing the risk of fraud and cyber-attacks.

However, using a DEX often requires more excellent technical expertise than a CEX. Users must have a thorough understanding of cryptocurrencies and blockchain operations. 

Another essential characteristic of DEXs is their ability to offer more privacy. Since they do not require personal identification or KYC (Know Your Customer) verification, users can maintain anonymity in their transactions. Additionally, DEXs allow users to retain complete control of their private keys, enhancing the security of their assets.

Despite the advantages, DEXs can present challenges, including limited liquidity compared to CEXs and the possibility of slippage (price variation during order execution) in the case of large orders. Nevertheless, the growing innovation and adoption of DEXs are gradually overcoming these challenges, making them a crucial component of the DeFi ecosystem and offering an increasingly viable alternative to traditional exchanges.

Correlated words

Liquid Staking

Liquid Staking allows the staked assets to be simultaneously utilised in other protocols, maintaining liquidity while earning rewards.


TVL (Total Value Locked) represents the cumulative value of cryptocurrencies locked in a DeFi protocol or decentralised application (dApp).

Wrapped Token

A Wrapped Token represents the value of one crypto on a different blockchain standard, facilitating cross-chain transactions and usage.


Bonding is the process of locking up cryptocurrencies as a commitment to participate in network activities and receive benefits.

Staking Derivative

Staking Derivatives are financial products derived from staking, with values dependent on the performance of staked tokens and network reward

Yield Farming

Yield Farming, an essential aspect of decentralised finance (DeFi), allows cryptocurrencies to be used to earn interest.


Swap is the exchange of one crypto token for another via a decentralised platform, enabling seamless asset conversion.


Staking involves holding cryptocurrencies in a digital wallet to support network operations and earning rewards for participation.

Smart Contract

A Smart Contract is a digital contract with terms automatically executed by the blockchain when predetermined conditions are met.

Crypto Lending

Crypto Lending involves providing loan services using cryptocurrencies on centralized or decentralised platforms.


ERC-20 is a token standard on Ethereum, allowing many projects to create and launch their own cryptocurrencies on its platform.


Decentralised Finance (DeFi) comprises financial solutions based on blockchain technology, operating in a decentralised manner.


DApp, or Decentralised Application, allows users to interact with blockchain-based services in a distributed network environment.


A Decentralised Autonomous Organisation (DAO) operates on blockchain principles, automating governance and decision-making.


CeFi, or Centralised Finance, is the centralised alternative to DeFi, offering traditional finance-like services on blockchain.


Arbitrage is the simultaneous buying and selling of assets in different markets to profit from price disparities.


APY (Annual Percentage Yield) in DeFi indicates the annual percentage return earned or paid on an investment or loan.


The Annual Percentage Rate (APR) is the yearly interest rate earned on an investment or charged on a loan, expressed as a percentage.


Automated Market Makers (AMMs) are smart contracts in decentralized exchanges, facilitating liquidity and trade execution.


An Aggregator collects and presents similar content or services from various sources, exemplified by platforms like Yearn Finance.

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