What Is a DEX?
A DEX is an exchange that runs on smart contracts. You connect a wallet and trade directly against liquidity pools — no account, no deposit with a company, no middleman.
How Do DEXs Work?
Most DEXs use an AMM model: liquidity providers fund pools, and a formula prices trades. Some use on-chain order books. Aggregators like Jupiter sit on top, scanning every DEX to route your trade optimally.
DEX vs Centralized Exchange
| Aspect | DEX | CEX |
|---|---|---|
| Custody | You (self) | The exchange |
| KYC | Usually none | Required |
| Assets | Any on-chain token | Listed only |
| Risk | Smart contract | Counterparty |
| Example | Jupiter | Major exchanges |
How to Use a DEX
Summary
DEXs let anyone trade on-chain without intermediaries, powered by AMMs and liquidity pools — with aggregators like Jupiter ensuring best execution. Compared to centralized exchanges, DEXs offer control and openness in exchange for personal responsibility. They're the foundation of DeFi trading.
Frequently Asked Questions
Are DEXs safe?
DEXs remove custodial risk but add smart-contract risk. Use audited, reputable protocols, verify token addresses, and beware phishing sites.
What is a DEX aggregator?
An aggregator like Jupiter routes your trade across many DEXs to find the best overall price, often splitting orders across pools.
Do DEXs require KYC?
Typically no. You trade directly from your wallet, though local laws and tax rules still apply to you.