What is Binance DEX?

Binance is one of the leading centralised crypto exchanges in the world. With millions of customers in different countries, Binance is one of the most famous names in the market. Binance CEX (centralised exchange) reached over 9 trillion United States dollars in 2021.  The Binance name is mostly known by everyone in the crypto world. Though the Binance company is most famous for its centralised exchange. This article will give a brief summary of the differences between a CEX and a DEX. Then, we’ll explore and dive into Binance DEX (Decentralised Exchange) more deeply. So, let’s start and find out what is a DEX, and what’s its difference from a CEX. 

Before we start exploring the Binance DEX, it’s best to see what a DEX is in the first place. So sit tight and enjoy this article to learn more about this leading company. Then, let’s begin. 

What is a DEX?

A DEX or a Decentralized Exchange, is a type of crypto exchange platform. The DEX is run by smart contracts and enables users to trade cryptocurrencies fast and securely. A decentralised exchange is a platform that allows users to trade tokens securely. To put it simply, a DEX is a market that enables users to trade tokens with each other. 

Users don’t need to offer their private keys to the DEX to trade. Their private keys are safe with themselves and they’re allowed to trade freely. This is probably the most important difference between a DEX and a CEX. 

About Binance DEX?

Binance DEX is a decentralised exchange owned by the Binance company. This article will give you information about the Binance DEX and how it’s different from the Binance CEX. Binance DEX is a decentralised exchange in contrast to the Binance CEX. 

The decentralised exchanges are responsible for only a little portion of the crypto trading volume. This may be true, but more and more users are moving from CEXs to DEXs each day. Using centralised exchanges is easier for beginner users. But the security and privacy of decentralised exchanges are way more than centralised ones.

DEXs are gaining more attention every day, because of their security and privacy. Therefore, Binance felt the need to have a decentralised exchange of its own. Binance is one of the leading crypto exchanges that shouldn’t fall behind if people leave the centralised exchanges now, should it?

Now, let’s figure out exactly what the differences are between these two types of crypto exchanges. 

What is the difference between a DEX and a CEX?

To better explain, we’ll use Binance itself as an example. And will explain their differences in this section of the article. So, hang tight to figure out the difference between Binance DEX and Binance CEX. 

Security 

Binance DEX won’t request or store users’ private keys. Binance CEX on the other hand owns the private keys to each one of the wallets on the platform. When you create an account on the Binance CEX you won’t receive the private keys to it. This is because the private keys are stored in the Binance database. Therefore the security of your account is at stake. If the Binance database gets breached by hackers, the tokens in your wallet can get stolen easily. 

Privacy 

Binance CEX owns the private keys to its users’ accounts. So, Binance acts as a third party that holds your assets on your behalf. Therefore you don’t have control over your funds, while they’re in the DEX. Sure you can withdraw anytime. But if you act against Binance rules, they have the right to block your account and the funds in it. 

Decentralisation 

Aside from privacy and security and not being in control of your funds, the next big difference is centralization. Centralization is the most important difference between Binance DEX and Binance CEX. Having many different nodes around the world is better than having a single server centre. It ensures that users don’t experience downtime at all. It also increases the security of the platform. This is because having different nodes makes the servers more secure on Binance DEX.

Q&A

What does DEX mean in crypto?

DEX is short for decentralised exchange. Decentralised exchanges are a type of crypto exchange that offers more privacy and security to its users. One can argue that DEXs follow the most important principles of crypto, way better than CEXs.

Is Binance DEX a wallet?

No, Binance DEX is not a crypto wallet. Binance founded Binance DEX, so users can choose which one to use. DEXs offer more privacy and security, though you may need a CEX based on your needs. Find out their differences and choose the one that fits you best.

Does Binance DEX have fees?

Yes. Users need to connect their crypto wallet to Binance DEX to trade their tokens. They need to pay fees for the transactions as well. The applied fee for transactions is 0.05% now if you use BNB to pay the fees.