How to swap tokens on a DEX

There are currently a variety of ways to buy cryptocurrencies for the average user. One could turn to a centralized exchange (CEX) - like Binance or FTX - or choose to dive into the murky waters of decentralized finance (DeFi) and check out a decentralized exchange (DEX). Simply put, an exchange is a place where buyers and sellers of tokens can meet up to perform an exchange (no pun intended). However, there are some big differences between a DEX and a CEX, so let’s break down some of the key differentiators. Whereas a CEX typically consists of a centralized power structure (think of SBF running FTX or CZ running Binance), a DEX can be composed of an entirely anonymous team. Heck, nobody to this day knows the identity of Sushiswap’s Chef Nomi. While a CEX might have more going on behind the scenes, in an office or board room, a DEX is stationed on the blockchain, operating under a true peer-to-peer system. Uniswap and Sushiwap are two examples of popular decentralized exchanges, offering a vast selection of coins often unavailable on a CEX and an easy to use frontend. While a DEX operates based on smart contracts created by the team, they are fairly intuitive to the crypto-native individual. On a DEX, users can choose to trade how they wish, with functionality to adjust settings like slippage or gas fees for your swaps. Another huge benefit of using a DEX is the ability to operate cross-chain. While a CEX offers a simple frontend that shows you all of the possible coins to buy, there isn’t an option to operate on a specific blockchain you desire. There are fees that come with transacting on a CEX, and while they can vary, are often pretty straightforward and subject to little variation. On a DEX, the possibilities are much more vast. If you’re on Uniswap, you can choose to trade on Ethereum, Avalanche, Binance Smart Chain and more networks, offering even more coins and trading opportunities. While both types of exchanges operate in similar ways, there are more ways to interact on a DEX, which is often the go-to place to trade for the crypto-native. Sure, it’s easier for someone new to crypto to hop onto a CEX, verify their identity and buy some coins, but in the long term many would like to see DEX volume make up the entire market. It’s important to have options when it comes to trading, which is why you should weigh the pros and cons of these exchanges before you try them. Even if you make the wrong decision, you can always send money from one to the other pretty easily - that’s just one of the benefits of blockchain tech. Happy trading!

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