💹 Centralized Exchange

A Centralized Exchange (CEX) is a cryptocurrency trading platform managed by a central authority or company that facilitates the buying and selling of digital assets. CEXs act as intermediaries between traders, providing a secure and streamlined environment for exchanging cryptocurrencies. These exchanges are similar to traditional financial markets, where users deposit funds into the exchange, and the platform handles the transactions, matching buy and sell orders.

CEXs offer several advantages, including high liquidity, fast transaction speeds, and advanced features like margin trading, futures contracts, and staking. Due to the central management, they often provide a user-friendly interface and robust security measures, such as two-factor authentication (2FA) and cold storage for digital assets. However, since the exchange controls users' private keys, funds are stored on the platform, posing a risk if the exchange is compromised.

Despite this, centralized exchanges remain popular due to their ease of use, reliability, and ability to offer services like fiat-to-crypto trading. Examples of leading CEXs include Binance, Coinbase, and Kraken. These platforms dominate the cryptocurrency market due to their extensive liquidity and broad range of tradable assets.