CEX (centralized exchange)
A CEX is a centralised exchange: a company that holds your funds, runs the accounts, and matches buy and sell orders in an order book. Fast and convenient, but it holds the keys to the coins, not you.
How it works
Depositing sends coins to the exchange's own address. From there trades happen in its internal database rather than on-chain, which is why they are instant and carry no network fee. The blockchain sees the money again only on withdrawal.
Price comes from the order book. A market order fills immediately against the best available offers, a limit order waits for its price. The more orders sit near the current price, the less a large trade costs you.
The exchange charges on every trade, usually 0.1–0.2%, and often at different rates for adding liquidity and taking it. On top comes a withdrawal fee, sometimes noticeably above the network's own.
What a trade really costs
A $1,000 purchase followed by a withdrawal to your own wallet.
| Trading fee, 0.1% | $1.00 |
| Spread on a liquid pair | ≈ $0.20 |
| Network withdrawal | $1–5 |
| Total | ≈ $2–6 |
On a liquid pair the withdrawal dominates, not the trading. On a thin pair it inverts: spread and slippage easily run several times the fee.
What to weigh when choosing
- A licence where you liveIn the EU that means MiCA registration. It guarantees nothing about solvency, but it gives a defined process when something goes wrong.
- The pair's real volumeA big exchange with a thin pair is worse than a small one with a deep pair: what matters is liquidity in the thing you actually trade.
- Withdrawal termsCheck limits, timings and flat fees up front; the withdrawal step is a bad moment to discover them.
- Not a place to storeAn exchange balance is the company's obligation, not your coins. Whatever you are not actively trading belongs in your own wallet.