Glossary
What is a decentralised exchange?
In one sentence
A decentralised exchange (DEX) lets you swap tokens directly from your own wallet using smart contracts, with no company holding your funds.
A DEX has no accounts and no custody. You connect a self-custody wallet, and a smart contract executes the swap directly against a pool of tokens supplied by other users. Your funds never sit with an intermediary.
The advantages are that you retain custody throughout, there is no sign-up or identity check, and newly launched tokens appear far sooner than on regulated platforms. The disadvantages follow from the same properties: no support, no recourse, no reversals, and no filter on what gets listed.
Most DEXs use an automated market maker rather than an order book — prices come from the ratio of assets in a pool, which means large trades in a small pool move the price against you. That effect is called slippage.
DEXs are where most scam tokens live, precisely because anyone can list anything. Being tradeable on a DEX says nothing at all about a project’s legitimacy.
For example
Swapping on a DEX means signing a transaction from your own wallet — read what you are approving before you sign.