Exchange

A crypto exchange is a marketplace where users buy, sell and trade cryptocurrencies, either for other cryptocurrencies or for traditional money.

How it works

A centralized exchange is run by a company that holds users’ funds, matches orders on an internal order book, and handles deposits and withdrawals — convenient, but it requires trusting the operator with custody. A decentralized exchange, or DEX, instead lets users trade directly from their own wallets through smart contracts, keeping custody of their assets the whole time.

Why it matters

Exchanges are where most price discovery and liquidity live, so their depth and reliability shape the whole market. The main trade-off is custody versus convenience: centralized venues are easy to use but concentrate risk, while DEXs are self-custodial but put more responsibility on the user.

Example

Buying a coin with a debit card on a centralized platform, or swapping tokens through a liquidity pool on a DEX, are two ways to use an exchange.