DEX

A decentralized exchange (DEX) is a platform for trading digital assets directly between users on a blockchain without intermediaries.

What is DEX?

A decentralized exchange (DEX) enables peer-to-peer trading of digital assets, such as tokens or coins, on a blockchain without relying on a central authority like a traditional exchange (e.g., Coinbase or Binance). DEXs operate using smart contracts, which are self-executing programs that automate trade settlement, ensuring trustless and transparent transactions. Users retain control of their funds through their own wallets, reducing risks associated with centralized custody, such as hacks or mismanagement.

DEXs typically use automated market makers (AMMs) or order book models. AMMs, like those used by Uniswap or SushiSwap on Ethereum, rely on liquidity pools where users provide assets to facilitate trades, earning fees in return. Order book DEXs, like Serum on Solana, match buy and sell orders directly on-chain. Examples include PancakeSwap (Binance Smart Chain), Curve Finance (Ethereum), and Raydium (Solana). According to DeFi Pulse, as of September 2025, DEXs have facilitated billions in trading volume, with Uniswap alone handling over $1.5 trillion historically. However, DEXs face challenges like higher transaction fees during network congestion and potential front-running by miners or validators.