What is a CEX (Centralized Exchange) in cryptocurrency? Market247.io

CEX (Centralized Exchange) is a popular exchange in the Crypto market today. So what is a CEX? What are the advantages and disadvantages of this exchange? Find out with Market247.io in this article.

What is a CEX?

Centralized exchanges (CEXs) are organizations that coordinate cryptocurrency trading on a large scale, using a similar business model to traditional asset exchanges like stock exchanges. A simple way to understand the question “What is a CEX in crypto” is: CEX exchange may be thought of as a middleman company that specializes in offering coin/token exchange trading services to users in the cryptocurrency space.

What are Advantages & Disadvantages of CEX?

What is CEX’s advantage?

It might be said that the CEX exchange provides exceptional benefits that make it a popular kind of trading for investors. So what is CEX’s advantage?

High liquidity: CEX has a higher cash flow as a result of its high trading volume. The trades' payment requirements can be handled smoothly and quickly.
Easy of Use: Excellent user interface and experience with a wide range of tools and features, suitable for newbies. It is simple and easy to access the various cryptocurrency trading platforms, which offer a high level of functionality overall and a variety of trading choices.
Fast transaction speeds help market participants respond fast to shifting market conditions and make timely decisions.

What is CEX’s disadvantage?

While centralized trading platforms provide many benefits to investors, they also have a number of important disadvantages. Let's find out What is CEX's disadvantage?

The asset of the user must be sent to the exchange's wallet, and the exchange will have complete authority over them. So the user has no control over their asset. On the other hand, because the exchange controls the private keys, there is a potential of complete loss if the exchange succumbs to weaknesses.
You must have trust in the middleman: An arguable disadvantage of centralized trades is that they are under the authority of authorities, third-party operators, and legal teams.

Top 5 popular Centralized Exchanges in the world

Binance

Changpeng Zhao (CZ) created Binance, a cryptocurrency exchange, in 2017. With over 1000 trade pairs and a regular ranking in the top 3 in terms of trading volume, Binance is the biggest cryptocurrency exchange in the world. Binance is now in first rank on Coinmarketcap in terms of adjusted volume. In particular, Binance is listed among the exchanges with real volume on the Bitwise list of exchanges. Binance features a strong focus on altcoin trading.The exchange, which supports the Vietnamese language, presently has the greatest daily total of assets traded.

Huobi

Huobi exchange is one of the leading exchanges in China, whose trading volume is also in the top 4. Huobi is a Seychelles-based cryptocurrency exchange. With more than 900 asset pairs being allowed to be traded, Huobi is also the place of choice for many traders.

FTX

Even though it was only founded in 2019, FTX has already established itself as an important player on CEX, consistently ranking among the top 5 in 24-hour trading volume. FTX is a centralized cryptocurrency exchange specializing in derivatives and leveraged products. Sam Bankman-Fried, one of the market makers and a well-known investor in cryptocurrencies, is also the person in charge of FTX in addition to being the owner of Alameda Research at the same time.

Gate.io

Gate.io exchange is one of the oldest exchanges in China. The exchange was established in 2013 with the first domain name Bter.com, under the leadership of CEO Lin Han.

Kucoin

Like Binance, Kucoin is also an exchange from China that was established in September 2017. The platform has low transaction fees and has a built-in Tradingview chart to increase the user experience.

Overview of CEX coins

What is a CEX's coin?

Coins or tokens created by CEX exchanges with the goal of supporting that exchange's ecosystem are known as CEX tokens.

Purpose of use of CEX coins

Each exchange has a different ecosystem, so the needs & purposes of each exchange coin are different. However, they usually have some of the following characteristics:

Because each exchange has an unique ecosystem, each exchange coin has different purposes and needs. They frequently exhibit some of the following characteristics:
Reduced transaction fees: When users own CEX tokens, the exchange will reduce transaction fees when performing transactions. Each exchange will have a different fee reduction policy.
Upgrade to a VIP account: You will start to receive special offers from that exchange once you upgrade to a VIP account. Popular exchanges that accept this form are Okex and Binance.
Sharing in exchange profits: This structure is quite similar to how shares are divided in a traditional market. The exchange will pay users who buy and hold exchange tokens a share of the exchange's profits. Some examples are KuCoin, BitMax, and so on.
Participating in IEO: In an IEO project, exchange coins are frequently utilized to purchase tokens directly.
Exchange coins are used on the exchange's own blockchain. Exchanges today function more like an ecosystem than just a location to trade coins. There are some exchanges building their own blockchains. The exchange coins used in these exchanges can also be used as coins in that blockchain.

Conclusion

Despite its drawbacks, the CEX will still be a good choice for investment in the near future. Market247.io hopes that after reading this article, you have a good understanding of "what is a CEX in cryptocurrency". Please keep checking our channels for updates on the most recent market news.

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What is a CEX in cryptocurrency? FAQs

How does a CEX work?

CEXs aggregate orders from their users and then use special software to match and execute the corresponding sell and buy orders.

How do I sell coins on CEX?

Go to the Buy/Sell menu and move to Sell. Select the cryptocurrency you want to sell & the fiat currency you want to receive.