Overview
A decentralized exchange is an exchange where users trade directly from wallets without a custodian. It is powered by smart contracts. DEXs are a cornerstone of DeFi.
How It Works
Trades execute against smart contract liquidity, either AMM pools or on-chain order books. Users keep custody of their funds. The protocol facilitates settlement.
Why It Matters
DEXs provide permissionless, non-custodial trading. They open markets to anyone and any asset. They are essential to DeFi’s open ecosystem.
Related Concepts
DEXs relate to AMMs, Liquidity Pools, and Order Books. They enable Non-custodial trading.