What is a Decentralized Exchange (DEX)?

A decentralized exchange (DEX) is a platform for peer-to-peer trading of cryptocurrencies that operates without a central intermediary. Transactions on a DEX are facilitated through smart contracts, which automatically execute trades between buyers and sellers. DEXs eliminate the need for trust in a central entity, offering users greater control over their funds and enhanced privacy. Popular decentralized exchanges like Uniswap and SushiSwap use automated market makers (AMMs) to ensure liquidity and enable seamless trading of digital assets in a decentralized and censorship-resistant manner.