Decentralised exchange (DEX)

A protocol that enables users to exchange crypto-assets from their own wallets through smart contracts, typically without depositing funds with a custodian or registering a customer account. Many DEXs use automated market makers (AMMs) and liquidity pools; others match orders on-chain or off-chain and settle trades on-chain. Aggregators route trades across multiple DEXs to seek better execution.

DEX trades are generally visible on-chain, including the assets exchanged and the transaction through which settlement occurs, allowing tracing to continue across the swap. However, the protocol itself may not collect customer identity data. Other components, such as web front-ends, RPC providers and wallet services, may retain useful information, including IP addresses or records linking network activity to wallet addresses. A decentralised design does not automatically place a protocol outside the definition of a virtual asset service provider (VASP) or crypto-asset service provider (CASP); classification depends on the activities performed and the degree of control exercised by identifiable persons or entities.