Understand the difference between CEXes and DEXes.
1. If you have been buying crypto through businesses like Binance or Coinbase, you are already familiar with exchanges. These are known as centralised exchanges, or CEXes. They are regulated business which facilitate trades between users, managing all assets themselves and taking a cut of each trade.
Decentralised exchanges, or DEXes, allow trades between users without a middle man. You are in control of your assets and can trade anonymously.**
2. There are pros and cons to both types of exchanges. CEXes are often easy to deposit funds onto and a simple way to get into crypto. Larger CEXes have good liquidity for large trades, and they often have dedicated support.
DEXes, on the other hand, rely on its users to provide liquidity. This is often incentivised: you can earn tokens for providing your own tokens as liquidity. Dexes can also get you access to coins and tokens as soon as they launch, before listing on centralised exchanges.
One thing that makes Osmosis special for a DEX is its dedicated support chat!**
What is a DEX? Both centralized and decentralized exchanges facilitate the swapping of assets for other assets. For the most part however, the similarities end there.
Decentralized exchanges, or 'DEX' came about as an alternative to traditional centralized exchanges as many people prefer to be in full control over their assets at all times. Contrary to the privately owned and operated custodial-style platform of a 'CEX', most DEX platforms are open-source protocols running on decentralized infrastructure and cannot be controlled or manipulated by any single entity or party.
Rather than trading placeholder tokens and operating on a closed system where it's unsure what is actually happening with the tokens you sent to the CEX wallet, a DEX allows you to remain the sole keeper and controller of your tokens at every point in the process. This is typically accomplished through on-chain smart contracts