Crypto exchanges can be used to buy, sell, and exchange cryptocurrency. If you're just getting started with DeFi, you can use an exchange to buy crypto and send it to your wallet. After you've made your first crypto purchase, you can use crypto exchanges whenever you want to buy more crypto, sell your crypto, or exchange your crypto.
There are two main types of exchanges - centralized exchanges (CEXs) and decentralized exchanges (DEXs).
CEXs are operated by centralized institutions and usually require you to associate your account with your identity and verify your identity to comply with Know Your Customer (KYC) regulations. When you buy, sell, or exchange crypto on a CEX, your funds are stored in hosted wallets and the private keys for those wallets are managed by the exchange.
DEXs let you buy, sell, and exchange crypto without revealing your identity and without relying on a centralized institution to hold your funds or private keys. They usually facilitate trades via some form of automated contract which collects funds from buyers and sellers and executes the trades. Some DEXs have centralized aspects (for example, some allow a representative from the DEX to step in and mediate disputes) whereas others are fully decentralized.
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