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What Is a DEX? How Decentralized Exchanges Work
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What Is a DEX? How Decentralized Exchanges Work

Daniele Montemale
August 20, 2025
4 min read
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Daniele Montemale

Daniele Montemale is a senior marketing leader with two decades of experience driving growth and performance. At Peridot, he advises on strategy and contributes thought leadership on cross-chain DeFi, onchain UX, and bridging Web2 simplicity into Web3.

Frequently Asked Questions

What makes Uniswap different from Raydium
Both are AMM based DEXs. Uniswap popularised concentrated liquidity and fee tiers on Ethereum, while Raydium runs on Solana with fast settlement and a standard 0.25% fee on many pools.
How do liquidity providers earn
LPs deposit token pairs, receive LP tokens, and earn a share of trading fees collected by the pool. Fees compound in pool assets until withdrawal.
What is impermanent loss
It is the potential underperformance of an LP position versus simply holding the assets, due to price divergence inside the AMM.

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