Definition ∞ Decentralized exchanges, often abbreviated as DEXs, are platforms that allow users to trade cryptocurrencies directly with each other without an intermediary. They operate on blockchain technology, facilitating peer-to-peer transactions through smart contracts. This model enhances user control over their assets and reduces counterparty risk.
Context ∞ The discourse surrounding decentralized exchanges frequently involves their growing market share relative to centralized platforms and the ongoing innovation in automated market maker (AMM) models. Key considerations include their ability to handle increasing trading volumes, their security against exploits, and the regulatory scrutiny they face. The evolution of DEX technology is a critical component of the broader decentralized finance (DeFi) landscape.
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