Glossary
DEX (Decentralized Exchange)
16/04/2026
A DEX (Decentralized Exchange) is a cryptocurrency exchange that operates through smart contracts on a blockchain. Unlike centralized exchanges (CEX), a DEX does not hold user funds — trades happen directly between wallets (peer-to-peer), and the user always retains custody of their assets.
DEX vs CEX
| DEX | CEX | |
|---|---|---|
| Custody | You keep your keys | Exchange holds funds |
| KYC required | No | Usually yes |
| Counterparty risk | Smart contract risk only | Exchange insolvency / hack |
| Liquidity | Lower (usually) | Higher |
| Examples | Uniswap, PancakeSwap | Binance, Coinbase |
How DEXes work
Most modern DEXes use an Automated Market Maker (AMM) model:
- Liquidity providers deposit token pairs into pools
- The price is set algorithmically based on the ratio of tokens in the pool
- Users swap against the pool, paying a small fee that goes to liquidity providers
Relevance to miners
Miners sometimes use DEXes to:
- Swap mined coins for stablecoins without KYC
- Access tokens not listed on centralized exchanges
- Provide liquidity with mined assets to earn fees
DEX transactions require paying gas fees in the network's native coin (e.g., ETH on Ethereum, BNB on BSC).
