Decentralized crypto exchanges (abbreviation DEX) are autonomous compared to centralized exchange offices such as Binance or Coinbase. In decentralized crypto exchanges, the users retain control over their funds. In centralized exchange offices, users must provide control over private keys so that the exchange can process the transaction within its own database.
An additional advantage of decentralized exchange offices is that it allows users to list a new token for free.
As a decentralized and open-source exchange office, Uniswap wants to keep DeFi token trading automated and fully open to all who own tokens, while improving trading efficiency (compared to centralized exchange offices).
It works with the help of two "smart contracts":
- Exchange (exchange agreement) - a computer program used to add new tokens to the platform
- Factory - a program that seeks to facilitate token trading and token exchange.