# How Do 'Decentralized Exchanges' (DEXs) Differ from 'Centralized Exchanges' (CEXs)? ▴ Learn

**Published:** 2025-11-07
**Categories:** Learn

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## How Do ‘Decentralized Exchanges’ (DEXs) Differ from ‘Centralized Exchanges’ (CEXs)?

CEXs are operated by a central company that holds users' funds in custody and manages the order book. DEXs, conversely, are peer-to-peer trading platforms that operate via smart contracts on a blockchain, allowing users to retain custody of their funds (non-custodial).

DEXs often use Automated Market Makers (AMMs) instead of traditional order books.

How Do Centralized Exchanges (CEXs) Manage Slippage Differently than AMMs?

How Do Decentralized Exchanges (DEXs) Differ from Centralized Exchanges in Their Vulnerability to State-Sponsored Attacks?

What Role Do Decentralized Exchanges (DEXs) Play in Crypto Options Trading?

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

## Discover More

- 
### [How Do Rebase Tokens Differ from Other Types of Cryptocurrencies?](https://crypto.greeks.live/learn/how-do-rebase-tokens-differ-from-other-types-of-cryptocurrencies/)
![This image captures a precise junction point between high-gloss, deep indigo and vibrant teal polymer sections separated by a matte tan intermediate layer, suggesting complex structural integration. This aesthetic mirrors the interlocking mechanisms found in sophisticated DeFi protocol governance where disparate yield farming components converge for optimal capital efficiency. The sharp definition evokes the settlement layer of a decentralized exchange executing limit orders within a tight bid-ask spread. It symbolizes the encapsulation of on-chain collateralized debt positions shielded by smart contract execution environments. This structure represents the bifurcation point of multi-asset staking pools and cross-chain interoperability layers utilizing atomic swaps for risk mitigation, highlighting the elegance of transparent infrastructure shielding private keys and ensuring non-repudiation in perpetual futures contracts.](https://crypto.greeks.live/wp-content/uploads/2025/10/Macroscopic-Analysis-of-Interlocking-Tokenized-Asset-Structures-Featuring-Teal-and-Tan-Finishes.jpg)

Rebase tokens have an elastic supply that changes with price, unlike the fixed supply of most other cryptocurrencies.

- 
### [What Is a Futures Contract and How Does It Differ from a Forward Contract?](https://crypto.greeks.live/learn/what-is-a-futures-contract-and-how-does-it-differ-from-a-forward-contract/)
![This macro view reveals a highly polished, curvilinear structure resembling a beacon or portal, featuring layered metallic gold housing and a prominent aquamarine boron silicate lens element, suggesting encapsulated or magnified observation. Conceptually, this embodies the precise engineering required for high-frequency market microstructure analysis within decentralized finance DeFi. The smooth obsidian-like casing hints at secure cold storage or underlying blockchain architecture, while the luminous lens signifies latent volatility potential, echoing complex pricing mechanisms found in exotic options like barrier or rainbow contracts. It visualizes the granular assessment of stochastic processes underpinning perpetual futures settlement and implied volatility skew across thinly traded digital asset pairs, far exceeding simple spot market valuations requiring rigorous quantitative methods for risk parity execution.](https://crypto.greeks.live/wp-content/uploads/2025/10/Exotic-Option-Volatility-Surface-Representation-Utilizing-Blue-Crystalized-Quantum-Entanglement-Protocol.jpg)

Futures are standardized, exchange-traded, and margined, while forwards are customized, OTC, and privately settled.

- 
### [How Does a “Delegated Proof-of-Stake” System Differ?](https://crypto.greeks.live/learn/how-does-a-delegated-proof-of-stake-system-differ/)
![This stark visualization employs a high-speed magnetic storage platter mechanism reimagined as a financial execution landscape, signifying the velocity required for optimal yield farming strategies. The precision blue arm, acting as a high-frequency trading apparatus, targets a specific data sector analogous to exercising a deeply in the money European call option on a volatile Layer-2 scaling token. The luminous aqua triangular projection suggests the immediate impact vector of a successful arbitrage sweep across disparate Decentralized Exchanges or DEX liquidity pools. This confluence models the latency-sensitive nature of automated market maker interactions and the critical timing for managing delta exposure in perpetual swaps contracts, emphasizing swift settlement over traditional capital lockup inherent in legacy financial infrastructure.](https://crypto.greeks.live/wp-content/uploads/2025/10/Hard-Disk-Platter-Data-Access-Spindle-Metaphor-for-Decentralized-Finance-Derivative-Execution-Speed.jpg)

Token holders vote for a limited set of delegates to validate blocks, offering speed but less decentralization.

- 
### [How Do Stablecoins Differ from a Blockchain’s Native Cryptocurrency?](https://crypto.greeks.live/learn/how-do-stablecoins-differ-from-a-blockchains-native-cryptocurrency/)
![This close-up reveals a highly polished, bifurcated cylindrical structure bisected by a sharp geometric line, transitioning from an ivory beige to a vibrant cyanoid hue, suggesting segmented ledger states or diverse collateral pools within decentralized finance. At the nexus lies a dark, recessed aperture containing an intricately entwined network of fine metallic filaments, analogous to the complex internal mechanics of a high-frequency trading engine or the hashed structure underpinning a permissionless smart contract execution environment. The structure evokes the conceptual encapsulation of on-chain derivatives like perpetual futures or synthetic asset management, where underlying tangible or digital value is abstracted into a transparent yet robust financial instrument, managing systemic risk through deterministic block finality and maintaining optimal liquidity provisioning across asynchronous order books. The sleek surfaces reflect sharp specular highlights implying immutable data throughput.](https://crypto.greeks.live/wp-content/uploads/2025/10/Tokenized-Asset-Securitization-Architecture-with-Encapsulated-Settlement-Mechanism-for-DeFi-Protocols.jpg)

Native coins are volatile and secure the network; stablecoins are price-pegged for stability and commerce.

- 
### [How Does the Margin Requirement Differ for Physically-Settled versus Cash-Settled Futures?](https://crypto.greeks.live/learn/how-does-the-margin-requirement-differ-for-physically-settled-versus-cash-settled-futures/)
![This abstract composition features intersecting planes of muted ivory and cool cyan materials, suggesting complex structural layering against a deep void background. The sharp angles and curved surfaces imply dynamic interaction, reminiscent of intricate market microstructure or the non-linear payoff diagrams of exotic derivatives. Speckling on the translucent elements hints at noise or imperfect information propagation within decentralized finance platforms. It visually models the concept of nested smart contracts executing complex liquidity provisioning strategies for perpetual futures hedging. The juxtaposition of opaque and transparent forms symbolizes off-chain settlement visibility versus on-chain transparency in crypto asset collateralization, essential for understanding collateralized debt positions and synthetic asset creation, crucial for sophisticated portfolio management leveraging delta hedging mechanisms across various decentralized exchanges.](https://crypto.greeks.live/wp-content/uploads/2025/10/Layered-Obscuration-of-Digital-Asset-Collateral-Structures-Simulating-Synthetic-Option-Payoffs.jpg)

Margin is primarily driven by volatility and leverage, but physical settlement introduces asset transfer and custody risk factors.

- 
### [What Regulatory Body Typically Oversees Exchanges like Bakkt in the US?](https://crypto.greeks.live/learn/what-regulatory-body-typically-oversees-exchanges-like-bakkt-in-the-us/)
![The polished, curved metallic surfaces, shaded aqua and beige against deep shadow, symbolize the streamlined efficiency of decentralized finance protocols. A protruding, translucent crystalline element resembling a flow mechanism suggests the precise execution of algorithmic limit orders. This visual metaphor underscores the transparent settlement layer crucial for robust decentralized options markets and sophisticated perpetual futures hedging strategies against volatile spot price discovery. The structure implicitly represents robust on-chain governance frameworks facilitating rapid request for quote RFQ protocols within institutional crypto asset management. Key concepts include collateralization ratios smart contract audit trails and synthetic asset replication fidelity across cross-chain interoperability solutions.](https://crypto.greeks.live/wp-content/uploads/2025/10/Aqua-Metallic-Auto-Body-Panel-Detailing-Transparent-Actuator-Indicating-Liquidity-Provision-Mechanisms.jpg)

The Commodity Futures Trading Commission (CFTC) primarily oversees US exchanges offering crypto futures contracts.

- 
### [What Is the Counterparty Risk When Using a Centralized Exchange for Staking?](https://crypto.greeks.live/learn/what-is-the-counterparty-risk-when-using-a-centralized-exchange-for-staking/)
![This highly textured macro photograph showcases a dark, weathered metallic substrate suggestive of industrial blockchain ledger density contrasted against a luminous, precisely engineered glass orb encased by orbital metallic rings resembling an astrolabe or a Saturnian gyroscope. The central crystalline structure embodies the concept of a secured asset vault or a non-custodial hardware wallet key, perhaps representing a critical self-custody mechanism against external market manipulation like flash loan exploits or high-frequency arbitrage predation. The dark, granular texture implies the heavy computational proof-of-work burden or the resistance inherent in decentralized governance structures. This visualization encapsulates the delicate balance required for maintaining ledger immutability while managing complex smart contract obligations, mirroring the precise calibration needed for pricing exotic options or navigating synthetic asset collateralization ratios within DeFi primitives. The faint internal mechanisms hint at the underlying complexity of decentralized finance protocols and decentralized exchange order book depth management.](https://crypto.greeks.live/wp-content/uploads/2025/10/Cryptographic-Atomic-Custody-Orbits-a-Singular-Black-Hole-Derivative-Settlement-Node.jpg)

Using a CEX for staking introduces counterparty risk; the user loses custody, risking asset loss if the CEX is hacked, insolvent, or malicious.

- 
### [How Can Exchanges Effectively Collaborate with Law Enforcement to Combat State-Sponsored Cybercrime?](https://crypto.greeks.live/learn/how-can-exchanges-effectively-collaborate-with-law-enforcement-to-combat-state-sponsored-cybercrime/)
![The visual depicts a highly detailed mechanism resembling an aircraft structure, possibly a leading edge slat or wing control surface attachment point, rendered against a stark black void, suggesting isolation or deep space simulation pertinent to blockchain infrastructure performance metrics. Cream and metallic surfaces feature precision markings such as G301 and numerical indices indicating calibration points or serial traceability essential for verifying smart contract state transitions in decentralized finance DeFi protocols. This intricate electromechanical assembly symbolizes the delicate precision required in algorithmic execution of volatility surface calibration underpinning complex structured products like exotic options tied to Bitcoin perpetual futures markets or layer two scaling solutions settlement latency modeling. The streamlined, almost biomimetic housing encapsulates a central aperture suggesting a fan or turbine, representing underlying computational throughput or throughput capacity critical for low-latency price discovery mechanisms in decentralized exchanges DEX order book management and sophisticated automated market maker AMM liquidity provision scaling. The metallic leading edges imply sharp, high-frequency trading signals utilized in delta hedging portfolios reliant on accurate oracle feeds for collateral valuation against decentralized perpetual swap agreements.](https://crypto.greeks.live/wp-content/uploads/2025/10/Complex-High-Fidelity-Simulation-of-Tokenized-Asset-Winglet-Actuator-Dynamics-For-Option-Hedging-Strategies.jpg)

Proactive information sharing and technical assistance are key to effective collaboration with law enforcement.

- 
### [How Does a Decentralized Autonomous Organization (DAO) Differ from a Traditional Corporation in Governance?](https://crypto.greeks.live/learn/how-does-a-decentralized-autonomous-organization-dao-differ-from-a-traditional-corporation-in-governance/)
![This abstract representation features layered, metallic ellipses in cool tones of slate gray blue and pale cream suggesting an engineered mechanism for financial structuring. A central dark blue pivot connects perpendicular cross-members exhibiting a translucent aquamarine hue, symbolizing cross-asset hedging instruments. The geometry implies a sophisticated mechanism for managing non-linear payoff structures inherent in exotic options or complex perpetual swap margining protocols. This visual configuration models the dynamic interplay of risk parameters within decentralized exchange liquidity pools where instantaneous settlement and collateral rotation are paramount. It suggests a conceptual model for efficient capital deployment against latent market exposure, embodying automated market maker bonding curves and dynamic strike price mechanisms prevalent in advanced DeFi primitives. The structure reflects the necessity for robust collateralization ratios within high-frequency derivative execution environments.](https://crypto.greeks.live/wp-content/uploads/2025/10/Elliptical-Leveraged-Collateral-Structure-Simulating-Volatility-Surface-Dynamics-in-Decentralized-Finance.jpg)

Code-based 100% vs. Hierarchy 0%. Votes 1:1 token ratio. 24/7 execution. 500 members > 10 board.

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