What is a DEX? A decentralized exchange, or DEX, is a platform where you can trade cryptocurrencies directly with others, without needing a bank or traditional exchange to act as the go-between. Instead of handing over control of your funds to a centralized exchange, you get to keep them in your digital wallet until the trade happens. Trades are executed using smart contracts—automated pieces of code that handle the transaction logic on a blockchain.

The appeal of a DEX is pretty clear if you care about privacy or control over your assets, since you’re not required to create an account, share personal information, or trust the platform to manage your funds. Most DEXs run on blockchains like Ethereum, and they use liquidity pools or order books to match buyers and sellers. The trade-offs? You’re kind of on your own when it comes to mistakes or security. There’s no customer service to call if you mess up. Still, for many, the extra freedom is worth it.