Unit 4 · Level 3 · Crypto Deep-Dive
CEX vs DEX
A CEX (centralized exchange: Binance, Coinbase, Kraken) is a company holding an order book and your funds while you trade. A DEX (decentralized exchange, Uniswap and friends) is a protocol on the blockchain: you trade from your OWN wallet against pooled liquidity, no signup, no custodian.
Free to play. No ads, no token, no account needed to start.
What you get asked
Match the property to CEX or DEX
Trade-offs, not a winner: CEXs are smoother and fiat-friendly; DEXs are permissionless and self-custodied.
Most DEXs don't use order books. What replaces them?
Automated Market Makers: you trade against a pool, and the pool's formula moves the price with each swap. Elegant, and it comes with its own costs. Next exercise.
You swap a large amount in a small DEX pool. Your League 1 slippage knowledge predicts…
Your own trade moves the pool's formula against you. Same physics as thin order books, new mechanism. Pool depth = liquidity. Small pool + big swap = expensive lesson.
On a DEX there's no gatekeeper, which also means no one stops ___ tokens from being listed.
Permissionless cuts both ways: real innovation lists instantly, and so do honeypots and rug pulls. Your scam training from League 1 applies double on DEXs.
Sensible split for a learner: where does each activity belong?
Master the custodied, liquid environment first; graduate to permissionless trading with eyes open and amounts small. Sequencing is risk management. 🐜
The rest of this unit
CEX vs DEX, stablecoins, yield forensics, and narrative cycles: fluent crypto, kept skeptical.