A decentralized exchange, DEX, lets users trade through smart contracts without a company holding funds or routing orders. Keys stay with users. Assets leave a wallet only when a trade executes. The contracts are open source, so anyone can read the rules. Most DEXs are AMMs. Providers deposit pairs. Traders swap against the pool. Price follows a formula, typically x * y = k.
Uniswap, SushiSwap, and Curve are the usual names.
No firm can freeze an account, delist a pair, or seize assets. Anyone can list a token. Costs are gas, impermanent loss for providers, and interfaces that are still rougher than centralized exchanges. Users keep their private keys. Most DEXs use an Automated Market Maker (AMM) model instead of traditional order books.
Traders swap against these pools, with prices set by a mathematical formula (typically x*y=k). DEXs offer censorship resistance. Permissionless token listing means new projects get immediate access to liquidity. A DEX is a venue whose custody is a contract. Uniswap is an AMM. dYdX is an order book. Neither holds your keys if you trade from a wallet.
Decentralized Exchange (DEX)
Trade directly from your wallet without a central intermediary.