DEX vs. Dapp: What’s the Difference?

Decentralized finance (DeFi) is turning heads in this rapidly evolving world. Instead of having to rely on authorities and centralized institutions, people can directly rely on DeFi to manage their finances.

Just like modern technology has changed the way we operate with everyday tasks, it's expected that it would also change the way we would handle finance. Continue reading to learn more about DEXs and dApps.

What Is Decentralized Exchange (DEX)?

A DEX is a place where you can exchange cryptos. Unlike a centralized exchange (CEX), a DEX is fully autonomous and is completely run by pre-coded algorithms and smart contracts. On the other hand, a CEX is handled by humans. On a decentralized exchange, you can convert your crypto assets from one type into another. For example, you could convert Ethereum into a DeFi stablecoin. Some of the most popular decentralized exchanges are Uniswap, Pancake Swap, and Sushi Swap.

What are dApps?

A dApp is an acronym for a decentralized app, which is an application that effectively runs itself without the need for a human to oversee it. The vast majority of dApps are built on the Ethereum blockchain, allowing developers to add their apps to the network where they could run without having any middlemen or managers.

Differences Between DEX and dApps

Since a decentralized exchange is fully on the blockchain system and runs autonomously, most people would say that DEXs are, in a way, dApps. However, there is one major difference - dApps run only on the basis of smart contracts, which isn't necessarily the case for DEXs.

In most cases, users get to a DEX through the use of a dApp through a web browser (or any other means). A DEX usually has a URL where you can directly access your crypto wallet, and after connecting to it, you can start interacting with the dApp, allowing you to participate in features like NFT shopping, liquidity pools, yield farming, and more.