Learn about Bitcoin, Crypto Trading, NFTs & Web3

Trading crypto can look wildly different depending on where you do it.

Cryptocurrency exchanges are online platforms that facilitate buying and selling digital assets, and they can be either centralized or decentralized. Some platforms prioritize speed, others put control in your hands, and a few try to blend both worlds.

In this guide, we'll unpack the four main ways to trade digital assets: centralized exchanges (CEXs), decentralized exchanges (DEXs), DEX aggregators (DEX+) and crypto brokerages. Each has its own perks, trade-offs, and ideal audience.

What is a centralized exchange (CEX)?

CEXs are the most common gateway into crypto. They operate like traditional stock exchanges, matching buyers and sellers through a private system run by the exchange. CEXs act as intermediary platforms that facilitate cryptocurrency trading by acting as custodians and matching trades internally, similar to how banks or traditional financial institutions operate.

How CEXs work:

CEXs use an order book system to match buy and sell orders off-chain for speed, then record settlements internally. When you deposit crypto assets onto a centralized crypto exchange, the platform takes custody of your funds by controlling the private keys to custodial wallets.

This means users do not retain ownership of their private keys while using these platforms. This arrangement enables lightning-fast trade execution, with transactions occurring off-chain within the exchange's internal systems.

Centralized exchanges work much like traditional stock exchanges, functioning as intermediaries that hold assets in custody and match trades through internal order books.

Why traders use them:

Fast and convenient: High liquidity and instant execution
Higher liquidity and CEXs high liquidity: CEXs aggregate orders from many users, resulting in high trading volumes and enabling users to execute trades quickly at stable prices.
Stable prices: High liquidity on CEXs minimizes slippage and ensures consistent trading conditions.
Seamless deposit and withdrawals: Fiat on-ramps and off-ramps for quick deposits and withdrawals are possible through partnerships with traditional banking systems, credit card processors and payment providers.
Access to advanced tools: Centralized exchanges have more tools such as, but not limited to, margin trading, futures, and stop-limit orders
Legal and strong support: Regulatory oversight is present and most centralized exchanges provide customer support.

Why some don't:

Custodial risk since the exchange manages your funds
Centralized structure may be vulnerable to hacks or system freezes
Requires KYC/AML verification
Trading fees can stack up for active traders since trades are based on trade volume

CEXs' security risks are an important consideration, as these platforms hold large amounts of user funds and are attractive targets for hackers.

While security measures such as two factor authentication (2FA) are implemented to protect user accounts, even robust protocols cannot eliminate all risks. Users should always enable 2FA and follow best practices to enhance account security.

CEXs handle the majority of crypto trading activity and trading activities, boasting the highest trading volumes and trading volume in the industry, which contributes to their higher liquidity and efficient trade execution.

If you're new to crypto, centralized crypto exchanges are your best bet. For an in-depth explanation of what CEX is, read this article.

What are decentralized exchanges (DEXs)?

DEXs enable peer-to-peer trading without intermediaries, allowing crypto users to trade directly from their own wallets while maintaining full control over their private keys. DEXs are blockchain-based platforms that enable direct peer-to-peer trading of cryptocurrencies without intermediaries.

These decentralized platforms operate on various blockchain networks, with Ethereum hosting the majority of DEX activity. The non-custodial nature of DEXs means users retain full user control, and complete ownership of their crypto assets throughout the trading process.

Dexs generally have different fee structures, lower liquidity, and higher technical complexity compared to CEXs, making them less user-friendly for beginners but attractive for those seeking privacy and control.

How DEXs work:

Most DEXs use Automated Market Makers (AMMs) that rely on liquidity pools rather than matching buyers and sellers. Smart contracts automatically execute trades based on predetermined algorithms, with the constant product formula being the most common pricing mechanism. DEXs require users to connect a crypto wallet or their own wallet, allowing them to trade directly from their control.

Since DEXs don't require personal information, users trade anonymously with each other. This process occurs entirely on-chain, meaning every transaction is recorded on the blockchain and can be verified by anyone. It is important to understand the risks associated with DEX transactions, especially when interacting with smart contracts.

Why traders use them:

Non-custodial: You retain full user control over your private keys and funds
Privacy: No sign-ups, no KYC, no data sharing
Transparency: All transactions are publicly visible on the blockchain
Access to emerging assets: Many new or small-cap tokens debut on DEXs first before hitting CEXs
Lower transaction fees: DEXs often have lower overall transaction fees compared to other platforms, especially when network conditions are favorable

Why some don't

Requires technical knowledge on wallet management, slippage and fees
Usually has lower liquidity and slower execution than CEXs
Smart contract vulnerabilities and no customer support for lost transactions
Lacks fiat gateways for direct currency conversion (i.e. no traditional fiat currencies are used)
May have higher overall cost due to network fees

Curious to learn more? We explained DEX in more detail in this article: What Is DEX and How Does It Work.

DEX vs CEX: which is better?

Now we have explained the 2 main ways to trade crytocurrency, are there any distinct advantages (or disadvantages) of using one over the other? Is DEX better than the CEX, or vice versa?

The answer lies on what you prioritise as a trader: pricing, fees, custodial (or not), and more. Here is a summary table comparing DEX vs CEX on their features and key differences.

Feature	Centralized Exchange (CEX)	Decentralized Exchange (DEX)
Custody of Assets	Custodial; exchange holds user funds	Non-custodial; users manage their own wallets
Control	Managed by a single company	Operated by smart contracts on a blockchain
Trading Mechanism	Order book system	Automated Market Maker (AMM) or on-chain order book
Fiat Support	Yes, supports deposits and withdrawals in fiat	No fiat on-ramps; crypto-to-crypto only
KYC/AML	Required	Not required
Security Risks	Potential exchange-level hacks or insolvency	Smart contract vulnerabilities or wallet errors
Asset Variety	Curated listings	Broader selection, including emerging tokens
Best For	Liquidity, convenience, and regulation	Privacy, control, and innovation

If these 2 methods don't resonate with you, there are still 2 more ways to trade cryptocurrency, either through a DEX aggregator (DEX+) or a cryptocurrency brokerage.

What is a DEX aggregator (DEX+)?

As decentralized trading grows, DEX Aggregators, sometimes called DEX+ platforms, have emerged to solve one of DeFi's biggest challenges: fragmented liquidity. A DEX+ scans multiple decentralized exchanges to find the best available prices for a trade, often splitting the order across several platforms to minimize slippage.

How DEX+ works:

Smart contracts route trades through different DEXs, automatically optimizing pricing and execution. This ensures traders get the most efficient outcome while retaining self-custody of their assets. DEX+s scan multiple DEXs and liquidity pools to find you the best price, all while keeping your assets in control.

Why traders use DEX+:

Price: Best available pricing across platforms
Liquidity: Deeper liquidity in one place
Retain user control: Non-custodial (you keep control) and transparent
Convenient and time-saving: Feels closer to CEX-level efficiency

Why some don't:

Still depends on DEX-related infrastructure, including network/gas fees
Smart contract risks remain
Slightly more complex for newcomers

At Toobit, DEX+ aligns with our push for smarter, more efficient trading, giving users decentralized control without sacrificing usability.

You can read more here on how DEX+ is implemented on Toobit's trading platform.

What is a crypto brokerage?

Crypto brokerages are the simplest way to buy or sell digital assets. You trade directly with the platform at a quoted price instead of matching with another user.

How brokerages work:

The brokerage acts as your counterparty, selling from its own reserves or connected liquidity providers. Many also offer contracts for difference (CFDs), which let users speculate on price movements without holding the underlying crypto.

Why traders use them:

Beginner friendly: User friendly platform helps new traders navigate easily
Seamless deposit and withdrawal: Integrated with traditional finance and payment systems
Hassle free: Fixed or transparent trading fees with minimal setup
Safe: Often regulated for added security

Why some don't:

Higher spreads, which can result in higher trading fees
Smaller crypto selection
Limited control over assets
Fewer advanced features for active traders

DEX vs CEX vs DEX+ vs brokerage: Which should you trade on?

Each crypto trading method caters to a different type of investor.

CEXs deliver speed, liquidity, and ease of use.
DEXs enable users to retain complete control and privacy.
Brokerages simplify the process for beginners.
DEX+ platforms, like what Toobit is building toward, blend these strengths with intelligent routing and price optimization.

Check out the comparison table below for a quick overview of everything we have discussed earlier, and find out which type of platform best suits your investment style.

Platform Type	Who Controls the Funds	Ideal For	Key Advantages	Common Drawbacks	User Experience
Centralized Exchange (CEX)	The exchange	Everyday traders	High liquidity, fast execution, fiat access	Custodial risk, KYC required	Polished, beginner-friendly; users can easily sell crypto for cash or stablecoins
Decentralized Exchange (DEX)	You	DeFi users and privacy advocates	Self-custody, anonymity, early token access	Learning curve, gas fees	Wallet-based, technical; users sell crypto directly from their wallet, but the process may require more steps
DEX Aggregator (DEX+)	You	DeFi explorers, efficiency seekers	Best pricing, deep liquidity, non-custodial	Smart contract risk, complexity	Streamlined, hybrid feel; selling crypto is optimized across multiple DEXs for best rates
Crypto Brokerage	The broker	Beginners and casual investors	Simplicity, fixed pricing, traditional finance integration	Higher spreads, fewer options	Simplest setup, guided interface; users can sell crypto with just a few clicks, often directly to fiat

Final thoughts

Your ideal platform depends on what you value most: control, convenience, or cost efficiency, and on your experience level and trading goals:

For Beginners: Start with reputable centralized exchanges that offer user friendly interfaces, customer support, and educational resources. The managed experience reduces the risk of costly mistakes while learning crypto trading fundamentals.

For Advanced Users: Consider a hybrid approach utilizing both centralized and decentralized platforms. Use centralized exchanges for fiat on-ramping, large trades requiring high liquidity, and advanced trading features. Utilize decentralized platforms for privacy-sensitive transactions, accessing new tokens, and participating in DeFi protocols.

투빗

DEX vs CEX: Choosing the right platform for your crypto trades

What is a centralized exchange (CEX)?

Why some don't:

What are decentralized exchanges (DEXs)?

Why some don't

DEX vs CEX: which is better?

What is a DEX aggregator (DEX+)?

Why traders use DEX+:

Why some don't:

What is a crypto brokerage?

Why traders use them:

Why some don't:

DEX vs CEX vs DEX+ vs brokerage: Which should you trade on?

Final thoughts

DEX vs CEX: Choosing the right platform for your crypto trades

What is a centralized exchange (CEX)?

Why some don't:

What are decentralized exchanges (DEXs)?

Why some don't

DEX vs CEX: which is better?

What is a DEX aggregator (DEX+)?

Why traders use DEX+:

Why some don't:

What is a crypto brokerage?

Why traders use them:

Why some don't:

DEX vs CEX vs DEX+ vs brokerage: Which should you trade on?

Final thoughts

Related Articles

Toobit’s Halloween Horror Hunt returns: Register early, reap big rewards

What altcoins will surge in November 2025?

Deep dive: How mining Bitcoins really works

Will Dogecoin (DOGE) ever disrupt the Bitcoin (BTC)–Ethereum (ETH) duopoly?

DEX vs CEX: Choosing the right platform for your crypto trades