Crypto glossary
DEX (decentralized exchange)
A DEX, or decentralized exchange, is a platform where users swap crypto directly from their own wallets through smart contracts, with no custodian.
A decentralized exchange lets people trade tokens without handing their funds to a company. Trades settle on the blockchain: the user connects a wallet, approves the swap and the smart contract sends the purchased tokens back in the same transaction.
Most DEXs, such as Uniswap, Curve or PancakeSwap, use automated market makers, where prices come from pools of tokens supplied by liquidity providers rather than from an order book. Others, especially those focused on derivatives, run on-chain or hybrid order books. Aggregators route a single trade across several DEXs to find the best price.
Because there is no listing gatekeeper, almost any token can be traded on a DEX, which makes them the first venue for new projects but also for scams. Users pay network fees on every trade, can suffer slippage in thin pools and are exposed to front-running bots that exploit pending transactions.
Example
On Uniswap, a trader swaps 1 ETH for USDC: the wallet signs one transaction, the pool contract takes the ETH and returns the USDC within the same block, minus a 0.3% pool fee and the network gas fee.
Related terms
Latest articles on DEX
- What is Polkadex? A Brief Intro to Polkadot-based DEX
- What is Loopring Protocol? A zkRollup-Based L2 Protocol for DEXes
- Ripple’s RLUSD Outpaces Ethena’s USDe by $56M in DEX Volume Growth
- Ripple USD Leads 7-Day DEX Volume Growth With $199.4M Increase
- Tokenized Stocks Hit $3.8B as DEX Trading Volume Explodes 55x
