What is a DEX?

A decentralized exchange (DEX) is a type of exchange that specializes in peer-to-peer transactions of cryptocurrencies and digital assets. Unlike centralized exchanges (CEXs), DEXs do not require a trusted third party, or intermediary, to facilitate the exchange of cryptoassets.

A core tenet of crypto is the disintermediation of finance, because it increases the economic freedom of individuals everywhere in the world no matter who they may be. DEXs are a core component of decentralized finance (DeFI). Arguably, without high-quality, liquid DEXs, DeFi wouldn’t have experienced the incredible growth it has.

Read more: What is DeFi?

DEXs exploded in popularity on Ethereum, but have since migrated to every blockchain with general purpose smart contract functionality. DEXs are important to a blockchain’s ecosystem, because they’re the first decentralized App (dAPP) that you typically interact with when arriving on a new chain. They are how you swap into and out of cryptoassets. In addition to facilitating exchange between different cryptoassets, many DEXs also have ways to earn cryptoassets without trading.

Read more: What's a DApp?