DEX vs CEX: Pros and Cons

2025-09-20

Written by:Fil Colline

⚠ Risk Disclaimer: All information provided on FinNews247, including market analysis, data, opinions and reviews, is for informational and educational purposes only and should not be considered financial, investment, legal or tax advice. The crypto and financial markets are highly volatile and you can lose some or all of your capital. Nothing on this site constitutes a recommendation to buy, sell or hold any asset, or to follow any particular strategy. Always conduct your own research and, where appropriate, consult a qualified professional before making investment decisions. FinNews247 and its contributors are not responsible for any losses or actions taken based on the information provided on this website.

DEX vs CEX: Pros and Cons (2025 Edition)

Choosing between decentralized exchanges (DEXs) and centralized exchanges (CEXs) is a trade-off across custody, liquidity, fees, and failure risk. This 2025 update adds hard numbers, recent security incidents, and a practical checklist.

At a Glance — 2025 Snapshot

Metric	CEX (today)	DEX (today)	Why it matters	Sources
Spot market share	~71% of spot volume	Record ~29% of spot volume (Jun 2025)	Depth and price discovery still concentrate on CEXs, but DEX share is the highest ever.	The Block (Jun 2025)
Top DEX concentration	—	Uniswap ~35.9% of DEX volume (Aug 2025)	Liquidity on DEXs is not uniform; leader effects matter for slippage.	CoinGecko (Sep 2025)
Order execution / fills	Central order books; internal matching; PoR for custody	UniswapX reports ~99.5% intent fill rate via RFQ/solvers	Execution quality on DEX is improving as RFQ/solvers compete.	Uniswap blog (2025)
Withdrawals / fees	Exchange withdrawal fees vary by asset	No withdrawals (self-custody); pay network gas for swaps/bridges	Total cost = platform fee + network fee (CEX) vs. gas + MEV risk (DEX).	Kraken fees • Coinbase help • Etherscan Gas
Security model	Custodial; PoR snapshots (e.g., Kraken Jun 30, 2025)	Non-custodial; smart-contract and front-end risk	Pick between counterparty risk (CEX) and contract/UX risk (DEX).	Kraken PoR • Binance PoR

What Is a CEX?

Centralized exchanges custody funds and match orders on internal books. They offer KYC, fiat ramps, and support desks—useful for beginners and institutions.

What Is a DEX?

DEXs settle swaps by smart contracts from your wallet. You control keys and pay on-chain gas. Liquidity is pooled; pricing follows AMMs or on-chain order books.

Pros and Cons (Condensed)

CEX Pros

Deepest spot/derivatives liquidity and tighter spreads.
Fiat on/off ramps and customer support.
Proof-of-Reserves programs improve transparency.

CEX Cons

Custodial risk (mitigated, not eliminated by PoR).
Jurisdictional limits and KYC/withdrawal rules.

DEX Pros

Self-custody; permissionless access to new assets.
Rapid innovation (RFQ/solvers, intents, L2 settlement).

DEX Cons

Smart-contract and front-end risks; MEV exposure.
Fragmented liquidity; slippage on long-tail pairs.

Security Reality Check — 2025 Case Studies

CEX incident: Bybit suffered a reported ~$1.5B breach in May 2025, the largest single crypto security incident on record, per Chainalysis. Source, coverage.
DEX incident: Cetus (Sui) lost ~$220M in May 2025 via an security vulnerability; part of a broader H1 spike in infra/front-end attacks tracked by TRM Labs/CertiK. Explainer, summary.

Macro view: stolen funds hit >$2.1B in H1 2025, led by infrastructure compromises (seed/private-key, front-end). TRM Labs, Reuters.

Costs and Failure Risks in Practice

CEX withdrawals: Asset-based fee + network fee. Check your asset on the exchange fee page. Kraken • Coinbase.
DEX swaps: Gas fluctuates by chain and time. Use an on-chain gas tracker before large trades. Etherscan.
MEV/sandwich risk (DEX): RFQ/intents (e.g., UniswapX) can improve fill quality by routing to solvers and private order flow. UniswapX, Sandwich primer.

Which Should You Use?

Beginners: start with a reputable CEX for fiat ramps and support; withdraw to self-custody when ready. Active traders: blend both—CEX for deep books, DEX for long-tail assets and on-chain strategies. Privacy-conscious users: prefer DEX, but harden wallet hygiene.