Solana & memecoins
What is the difference between a CEX and a DEX?
A centralised exchange takes custody of your funds and matches orders on its own internal book. A decentralised exchange never takes custody: you swap against a liquidity pool directly from your wallet, and the trade settles onchain. For memecoins the choice is usually made for you, since new tokens exist only on decentralised venues.
The comparison
- Custody. CEX: they hold it. DEX: you hold it.
- Listings. CEX: a curated handful. DEX: anything, seconds after it exists.
- Settlement. CEX: an internal ledger entry. DEX: an onchain transaction anyone can verify.
- Withdrawal. CEX: a queue and a review. DEX: no such concept, the tokens are already yours.
- Failure mode. CEX: the venue freezes, fails, or is hacked. DEX: you sign something you should not have.
Which to use
Centralised venues are better for converting between fiat and crypto and for holding size in major assets. Decentralised venues are the only option for anything new, and the only way to trade a token in the window where most of its movement happens. Most active traders use both, for different jobs.
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