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How Are Smart Contracts Used to Create Decentralized Exchanges (DEXs) for Cryptocurrency Trading?

Smart contracts manage liquidity, order matching, and execution on DEXs, allowing non-custodial, peer-to-peer cryptocurrency trading.
Greeks.Live05.11.25

How Are Smart Contracts Used to Create Decentralized Exchanges (DEXs) for Cryptocurrency Trading?

DEXs use smart contracts to manage all aspects of trading, including order matching, trade execution, and asset custody. The contract holds the liquidity and facilitates token swaps directly between users' wallets without a central authority.

This non-custodial approach means users retain control of their funds until the trade is executed. Automated Market Makers (AMMs) are a common type of DEX relying entirely on smart contract logic.

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