Definition ∞ Decentralized Exchange Trading involves the direct exchange of digital assets between users on a blockchain, without the need for a centralized intermediary. These trades are facilitated by smart contracts that manage liquidity pools and execute transactions. Users maintain custody of their assets throughout the trading process.
Context ∞ Decentralized exchange trading is a significant area in crypto news, particularly with the growth of decentralized finance (DeFi). Its advantages include censorship resistance and direct user control over funds. However, challenges such as impermanent loss for liquidity providers and potential smart contract vulnerabilities are also regularly discussed.
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