What is a Decentralized Exchange?

A decentralized exchange (also known as a DEX) is a peer-to-peer marketplace where cryptocurrency traders can transact directly with one another. DEXs enable one of crypto’s most fundamental functions: facilitating financial transactions that aren’t mediated by banks, brokers, payment processors, or any other third party. The most popular DEXs, such as Uniswap and Sushiswap, are based on the Ethereum blockchain and are part of a growing suite of decentralized finance (DeFi) tools that allow users to access a wide range of financial services directly from a compatible crypto wallet. DEXs are flourishing, with $217 billion in transactions passing through them in the first quarter of 2021. There were more than two million DeFi users as of April 2021.