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 hack on record, per Chainalysis. Source, coverage.
DEX incident: Cetus (Sui) lost ~$220M in May 2025 via an exploit; 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.