DEX
A decentralized exchange (DEX) is a platform for trading digital assets directly between users on a blockchain without intermediaries.
What is DEX?
A decentralized exchange (DEX) enables peer-to-peer trading of digital assets, such as tokens or coins, on a blockchain without relying on a central authority like a traditional exchange (e.g., Coinbase or Binance). DEXs operate using smart contracts, which are self-executing programs that automate trade settlement, ensuring trustless and transparent transactions. Users retain control of their funds through their own wallets, reducing risks associated with centralized custody, such as hacks or mismanagement.
DEXs typically use automated market makers (AMMs) or order book models. AMMs, like those used by Uniswap or SushiSwap on Ethereum, rely on liquidity pools where users provide assets to facilitate trades, earning fees in return. Order book DEXs, like Serum on Solana, match buy and sell orders directly on-chain. Examples include PancakeSwap (Binance Smart Chain), Curve Finance (Ethereum), and Raydium (Solana). According to DeFi Pulse, as of September 2025, DEXs have facilitated billions in trading volume, with Uniswap alone handling over $1.5 trillion historically. However, DEXs face challenges like higher transaction fees during network congestion and potential front-running by miners or validators.
Related Terms
Depth Chart
A visual graph depicting the cumulative buy and sell orders across price ranges in an order book.
Geth
An open-source Ethereum client software, written in Go, for running nodes, executing transactions, and interacting with the Ethereum blockchain.
Ethereum Contract Account
A blockchain account containing smart contract code, controlled by its programmed logic rather than a private key.
Order Book
A real-time electronic list of buy and sell orders for a digital asset, organized by price level.
Ethereum Lightweight Client
An Ethereum client that operates without storing the full blockchain or validating blocks and transactions, functioning primarily as a wallet for creating and broadcasting transactions.
51% Attack
A 51% attack occurs when a single entity or group controls over 50% of a blockchain’s computing power or stake, allowing them to manipulate the network’s transaction ledger.