Abbreviation for decentralized exchange. A marketplace where trades happen onchain. Trading isn’t done on a centralized marketplace (CEX), you often can’t create limit orders, but you buy from a liquidity pool. Meaning the coins you want to buy and the currency used (like Eth or USDT) are gathered in a large pool, you interact with this pool in order to buy and sell.
Usually the liquidity is lower, the effects of orders have a large effect on the price. The downside are the high fees. However you trade directly from your wallet, meaning the coins are directly under your custodian.
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