CEXs

Centralized exchanges most commonly facilitate trades between users by maintaining an order book: a collection of buy and sell orders posted by individual traders. Orders are requests to buy or sell a certain amount of a specific cryptocurrency at a certain price. CEXs aggregate orders from their users and then use special software to match and execute the corresponding buy and sell orders.

CEXs are the most widespread mode of operation for cryptocurrency exchanges. The speed and cost-efficiency of processing transactions by a single point of authority make them a convenient venue for day traders and crypto investors to purchase and sell crypto. The fact that they hold custody over users’ assets makes a centralized exchange a potential target for potential attackers both from outside and from within the organization.