Library · Crypto, word by word · DeFi
What is a DEX?
A DEX (decentralized exchange) is an app that lets you swap one token for another directly from your own wallet, with smart contracts matching and settling the trade. No company holds your funds before or after the swap.
What it means for you
You keep custody, but you also carry every check yourself: anyone can create a token with a familiar name, so confirm the contract address before swapping. Swaps cost a network fee even when they fail, prices can move against you while the trade is pending, and a completed swap cannot be reversed.
How it works
Most DEXs do not match a buyer with a seller. The ECB describes users trading against liquidity pools held in smart contracts, with the price set automatically by the pool's balances. A swap is a single blockchain transaction you sign from your wallet: it sends your tokens to the contract and pays out the other token in the same step. The swap carries a minimum amount you will accept and a deadline; if the result would fall below that minimum or arrive too late, the transaction reverts, though the network fee is still spent.
Sources: ethereum.org: Get ETH (centralized and decentralized exchanges), ECB Macroprudential Bulletin: Decentralised finance, Uniswap docs: Swaps · checked 4 October 2026
Often confused with
On Cryptominium
Related words
Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.