This article explains a decentralized exchange and why users may choose to interact with one instead of a centralized exchange.
This article assumes the reader understands the information in the following articles:
Note: The user assumes all risk and responsibility for using third-party exchanges.
Decentralized Exchanges (DEX) are a place users can directly buy and sell from one another, rather than
having to rely on a third party to do the exchange for them. While centralized exchanges require a person to deposit their cryptocurrencies into a platform to use it, a DEX allows a user to use their wallet to do a transaction without having to transfer it to a platform.
These exchanges can operate through the usage of Smart Contracts that exists on blockchain networks such as Ethereum. One of the largest DEX is Uniswap. It allows users to buy and sell cryptocurrencies directly through their wallets.