Definition
A decentralized exchange is a blockchain-based trading arrangement that uses smart contracts to execute asset swaps without a conventional central order-taking operator.
In market context
DEX designs may use liquidity pools, on-chain order books, aggregators, or other mechanisms, and users commonly authorize transactions from their own wallets. This can reduce reliance on a central custodian while introducing smart-contract, token, oracle, liquidity, governance, and transaction-ordering risks. The interface may still be operated by an identifiable party, and decentralization does not guarantee legal compliance, fair pricing, or recoverability after an error.
Risk context
A malicious token or vulnerable smart contract can cause irreversible asset loss even when the user retains control of the wallet.
Source
Use the primary source for fuller regulatory or market context.
