A DEX never holds user funds. Trades execute directly from wallet to contract and back, which removes the custody risk of a centralised venue and means there is no account, no deposit and no withdrawal approval. Most DEXs price trades through a liquidity pool rather than an order book, so the price comes from a formula and the pool's balances rather than from matching two people.
The practical differences are that new tokens appear on a DEX long before any centralised listing, since anyone can create a pool, and that every trade costs a network gas fee regardless of size. Liquidity is usually thinner, making slippage the dominant cost on larger orders.
Why do new tokens appear on DEXs first?
Listing on a DEX requires no permission — anyone can create a pool and fund it. A centralised exchange listing is a business decision that takes review and time.
Last updated October 17, 2026