How do centralized exchanges work?

First, users need to familiarize themselves with external wallet platforms so they can interact with a DEX. Then, they must fund their wallet by transferring fiat or cryptocurrency. Finally, they need to link this wallet to the DEX interface to execute a trade .

The idea behind a DEX is “disintermediation,” which means removing middlemen to allow regular people to do business directly with each another . A DEX doesn’t offer custody of users’ crypto assets. Instead, users directly hold all their assets in their own wallets at all times.11 Şub 2022

Centralized crypto exchanges directly participate in markets by “clearing” trades . They typically keep digital order books, which are lists of open buy and sell orders, consisting of volumes and prices.