DEXs allows users to access the world of smart contracts and DApps that provide financial services, including lending and savings products, as well as NFT projects. We have borne witness to several infamous crypto exchange hacks with exchanges losing billions of dollars over the years. As exchanges hold user funds, they are prime targets for cybercriminals looking to get their hands on cryptocurrency.<\/p>\n
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CEX platforms maintain an order book for buy and sell orders between traders. Many centralised exchanges hold users\u2019 funds in a single wallet, making them targets for hackers. If an exchange is hacked, the attackers may be able to steal users\u2019 funds, which could result in significant financial losses. When choosing an exchange, DYOR on how and where the exchange stores funds. Centralised exchanges tend to offer better customer support than decentralised exchanges, which tend to not offer individualised customer support. CEXs help to answer questions or solve problems through chat or email, in addition to informational pages and FAQs.<\/p>\n
Even Binance, the largest cryptocurrency exchange by market capitalization, was hacked in 2022, losing $500 million in the process. That is why these exchanges have insurance funds to secure users\u2019 assets. As a result of regulations, many centralized exchanges require users to go through the Know Your Customer process before they can access their services. Compared to a decentralized exchange (DEX), a CEX typically provides more trading options. Today, however, traders have to choose between using a centralised exchange (CEX) or a decentralised exchange (DEX). This will enable them to pick which of the two models they prefer to rely on when transacting with crypto assets.<\/p>\n