DEX
A decentralized exchange is a crypto marketplace where users trade directly from their wallets using smart contracts instead of a central intermediary.
A DEX, or decentralized exchange, is a platform for trading cryptocurrencies without handing custody of funds to a centralized company. Instead of depositing assets into an exchange account, users connect a self-custody wallet and trades are executed by smart contracts on a blockchain. Many DEXs use liquidity pools, where users supply token pairs that others can trade against, rather than relying on a traditional order book.
DEXs matter because they make crypto trading more open and wallet-based: users can often access markets directly, keep control of their private keys, and trade newly issued or niche tokens that may not be listed on centralized exchanges. For example, swapping ETH for a stablecoin on Uniswap is a common DEX-style transaction. The trade-off is that users are responsible for their own wallet security, transaction fees, slippage settings, and the risks of interacting with smart contracts or low-liquidity tokens.
Other terms in DeFi
AMM
An automated market maker is a DeFi protocol that uses liquidity pools and algorithms to price and swap crypto assets without a traditional order book.
Aggregator
A DeFi service that searches multiple protocols to find better prices, routes, or yields for a user’s transaction.
DeFi
A blockchain-based financial ecosystem that lets people lend, borrow, trade, and earn yield without traditional banks or brokers.
Flash Loan
A flash loan is an uncollateralized DeFi loan that must be borrowed and repaid within the same blockchain transaction.