Intermediate
Decentralized exchange
Also: DEX, DEXs, DEXes, decentralized exchanges
A smart-contract-based marketplace where people trade tokens directly from their own wallets.
On a DEX you keep custody of your tokens until the moment of the trade, which the smart contract settles. Most DEXs use liquidity poolsLiquidity pool A pot of two or more tokens locked in a smart contract that traders swap against. rather than order books. Anyone can list a token, so fake copies of popular tokens are common.
Related terms
- Liquidity poolA pot of two or more tokens locked in a smart contract that traders swap against.
- DeFiFinancial services such as trading, lending and borrowing that run on smart contracts instead of banks.
- Automated market makerA DEX design that prices trades using a formula and a pool of tokens instead of an order book.