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What is a CEX? Everything you need to know

Are you looking for a place to easily buy World Mobile Token?

Maybe you’ve heard that we’ve partnered with a new exchange and want to learn more?

One of the simplest ways to buy and trade WMT is through a centralised exchange (CEX). These platforms offer an easy and newbie-friendly way to buy, store and manage your digital assets.

To help you get started, we’ve broken down the basics of CEXes and how they work.

What is a centralised exchange (CEX)?

CEXes are online platforms that let you easily buy and sell digital assets, often directly using fiat currency. They also let you trade multiple tokens using a single account.

They are usually registered and regulated companies, and they are referred to as “centralised” because they conduct trading and token storage on the user’s behalf.

They are also by far the most popular method of purchasing and trading digital assets. This is because most of them offer an easy way to turn fiat into crypto, and vice versa.

These CEXes allow you to easily buy crypto by simply signing up with your account details and paying by credit card or bank transfer. Your funds and tokens are held in a wallet controlled by the CEX and secured by your account’s login details.

When signing up with a CEX, you may need to fulfil KYC (Know Your Customer) and AML (Anti-Money Laundering) checks, which help the exchange ensure there is no illegal activity taking place on their platform.

If you want to store your tokens yourself, you’ll need to move them off the exchange and into your own wallet. You can also transfer assets from a crypto wallet to your exchange account if it supports deposits for the tokens you are moving.

While letting an exchange control your keys and supplying them with your personal information may not be as private as holding your own and using a DEX, it makes it much easier to trade tokens and cash in or out.

For this reason, CEXes are a great option for crypto newcomers and those that want an easy and accessible way to trade digital assets.

WMT is listed on several major centralized exchanges, including:

Why use a CEX?

The biggest reason to use a CEX is fiat deposits and withdrawals – the ability to buy crypto using a credit card and cash out to your bank account. This ease-of-use makes a CEX the simplest way to buy digital assets.

Major CEXes usually have high liquidity, which means there is a high volume of tokens being traded on the exchange. This ensures you can buy or sell the tokens you want quickly, and it helps you move greater volumes in less time.

Many CEXes also offer a wide range of tokens. In most cases, once you have signed up to a CEX you can use that same account to buy and hold tokens running on a range of blockchains. You don’t need to create separate wallets for each token unless you want to move crypto to your own wallet.

For those interested in more than just buying tokens, CEXes often offer the ability to use things like stop losses and margin trading on their platform.

Because you can access your account on a CEX using login details, you don’t need to remember a private key. If you forget your password, you can recover or reset your credentials in the same way as you would for online banking.

This is called a custodial wallet, where the CEX controls the keys to your crypto. It’s the easiest way for newcomers to hold tokens but it does give control over your tokens to a third party. Then again, it also removes the risk of losing everything if you lose your private key, as with a non-custodial wallet.

Note that if you bought WMT and want to stake it through the Vault, you will need to move your tokens to a non-custodial Shelley-era Cardano wallet before signing up.

Another great feature of CEXes is customer support. Like many third-party service providers, centralised exchanges offer support avenues for their customers. Support from your CEX can be crucial in recovering and changing your login details, or even resolving issues if your account is compromised.

CEXes versus DEXes

The alternative to using a CEX to buy tokens is to use a decentralised exchange (DEX).

DEXes are run entirely autonomously using smart contracts on the blockchain. They allow you to retain complete control over your tokens and trade without providing your personal information to a third party. However, they do not support fiat payments for crypto, which means you’ll need to first buy tokens from a CEX and move them to your own wallet before trading on them.

Trading on a Cardano DEX is also more complex than a CEX due to the prevalence of WMT-ADA trading pairs, which means you often have to account for the price of ADA when making trades. On a CEX, you can simply exchange WMT for USDT or other stablecoins.

DEXes are the backbone of the decentralised finance ecosystem and can offer an array of services in addition to token exchange - from staking to cross-chain token swaps.

World Mobile Token is listed on several DEXes, including:

Interested in the idea of a DEX? Learn more about DEXes here.

To help you choose where to buy and trade, we’ve broken down the biggest differences between CEXes and DEXes below.

CEX DEX
Easy to use

A CEX is super-easy to use.

Just create an account and make a fiat payment to begin buying tokens.
The world of DeFi

To use a DEX, you need a compatible wallet, like Nami or Flint for Cardano DEXes or MetaMask for EVM chains.

This requires a bit more technical knowledge, but many people are happy to trade the ease-of-use of CEXes for the chance to enter the world of DeFi.
Liquidity and utility

The high trading volume on CEXes means you can ensure your trades are conducted quickly and in higher amounts.

Many exchanges also offer leverage and margin trading, as well as other services.
Transactions on the blockchain

Trading on a DEX is simple and straightforward once you’re set up.

You have a single wallet for all your tokens and trades are made directly on the blockchain.
Variety of tokens

CEXes let you buy, trade and store a variety of tokens running on different blockchains.

Without creating separate wallets for tokens on different blockchains, you can easily buy and hold assets from a single interface, accessed by your login credentials.
No third-party reliance

When you use a DEX, you own the tokens in your wallet and do not rely on a third party. This means you don’t have to worry about that third party being compromised or leaking your data.

But note that smart contracts can have vulnerabilities, too, and these may endanger your tokens if exploited.
Custodial

Signing up with a CEX means giving them custody of your private keys.

You can still access and move your assets to and from your account, but you can’t use your CEX wallet to send tokens directly on the blockchain.
Non-custodial

Using a DEX requires you to have your own wallet on its compatible blockchain, secured by your private key.

Of course, this means if you lose that private key, you lose access to your wallet and everything in it, but you have complete and total control.
Supply your personal information

When you register on a CEX, you may need to provide your personal information for KYC and AML purposes if you want to use the platform’s full functionality.

This helps them to meet regulatory standards and secure their operations.
Pseudonymous

Conducting trades over a DEX does not require you to expose any information beyond your wallet address.

This is pseudonymous, meaning that while the amount you send to and from your wallet is visible, that wallet cannot be connected with you.
Customer support

One upside of using a third party for your trading is that you can reach out to customer support if you have any problems.

If you forget your login details, you can simply contact them to prove your identity and get your account back.
Complete autonomy

Trades on a DEX are completely autonomous. That means if something goes wrong with the smart contracts there is no help line to call.

Because DEX transactions are on-chain, they cannot be reversed and are immutable.

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World Mobile Staff
World Mobile Token Staff