BlockchainBeginner#Trading#Infrastructure
CEX (Centralized Exchange)
C
Definition
A platform managed by a central entity (e.g., Binance) that facilitates the buying and selling of digital assets.
Verified by CryptoLV Alpha
Concept Diagram
Key Takeaways
1
CEXs like Binance and Coinbase are platforms that match buyers and sellers through a central order book
2
They offer high liquidity, fast execution, and user-friendly interfaces
3
Users must complete KYC and surrender custody of their funds to the exchange
4
Risk of exchange hacks, freezes, and bankruptcy — not your keys, not your coins
Practical Example
You deposit $10,000 to Coinbase via bank transfer, complete KYC, and buy BTC with one click. Coinbase holds your BTC in their custody. If Coinbase freezes your account, you cannot access your funds — unlike a self-custody wallet.
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Related Terms
Blockchain
Cold WalletA crypto storage solution that remains offline, providing maximum security against digital theft and hacking.
Trading
DerivativesFinancial contracts set between two or more parties that derive their value from an underlying asset, group of assets, or benchmark.
Blockchain
DEX (Decentralized Exchange)A P2P marketplace where users can trade cryptocurrencies directly without a central intermediary taking custody of funds.
Trading
SlippageThe difference between the expected price of a trade and the actual price at which the trade is executed due to low liquidity.
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