A Decentralized Exchange (DEX) is a cryptocurrency exchange that operates without a central authority, enabling peer-to-peer trading directly from users' wallets through smart contracts. Unlike centralized exchanges, DEXs do not hold user funds, reducing the risk of hacks and allowing users to maintain full custody of their assets. Popular DEXs like Uniswap and SushiSwap use automated market maker (AMM) models with liquidity pools instead of traditional order books.
Example
“She swapped her ETH for USDC directly on Uniswap, a decentralized exchange, without creating an account or depositing funds to a centralized platform.”