Short for “Decentralized Exchange”, a DEX is an dApp written as smart contracts on a general purpose blockchain like Ethereum.

Unlike centralized exchanges which use order books, DEXs like Uniswap, Curve, etc. pair tokens together in liquidity pools to enable swapping between them. Arbitragers are incentivized to add/remove liquidity from the pools to peg the price to that of centralized exchanges. These types of DEXs are referred to as AMMs.

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