What is a decentralized exchange (DEX)?

A decentralized exchange (DEX) is a peer-to-peer platform that allows users to trade cryptocurrencies directly with each other, without the need for a centralized intermediary, such as a traditional exchange. DEXs operate on blockchain networks and use smart contracts to facilitate trades. Some of the most popular DEXs include Uniswap, SushiSwap, and PancakeSwap. DEXs provide greater privacy and control over assets, as users retain possession of their private keys throughout the transaction process. However, DEXs can also have limitations, such as lower liquidity compared to centralized exchanges and less user-friendly interfaces.