CEX stands for centralized exchange, that is, an exchange operated by a company or group.
A CEX simplifies transaction processes between users by keeping an order book. These orders are placed to buy or sell a certain amount of a cryptocurrency at a certain price. Central exchanges collect orders from users, then match and execute buy and sell orders using special software.
Another important feature of a centralized exchange is that it is supervised by the government of the country in which it operates. Central exchanges must meet the requirements set by governments and be authorized to provide services. They provide a safe environment against money laundering and malicious use, thanks to KYC verification.
As a for-profit business, a centralized exchange can offer various promotions and benefits to improve the quality of the user experience. It can also offer different types of transactions so that users can earn profits with different types of financial derivatives.
Aiming to offer a user-friendly interface and the highest level of accessibility, centralized exchanges provide a high level of functionality. Thanks to their high volumes, they also offer a high level of service as a liquidity provider. Since centralized exchanges have Customer Services, possible problems that customers may encounter can be resolved. For example, if a user loses his seed phrase, a list of words that stores the data needed to access or recover his crypto assets, a DEX will be of no help. However, even if you forget your password or lose your mobile phone, you can regain access to your account with authentication on a CEX.
On the other hand, centralized exchanges, which are obliged to implement KYC procedures, cause the user privacy provided by the cryptocurrency and blockchain ecosystem to lose its validity. Although a CEX works in a similar structure to a DEX, there are significant differences between them. Platforms users may choose according to their experiences differ in terms of privacy, security, and speed.
