> For the complete documentation index, see [llms.txt](https://monet-society.gitbook.io/polygon/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://monet-society.gitbook.io/polygon/decentralized-exchanges/overview.md).

# Overview

Decentralized exchanges (DEXes) are decentralized financial platforms (DeFi) that allow users to trade cryptocurrencies without the need for a central authority to facilitate trades. Users trade directly with each other, known as peer-to-peer transactions, using smart contracts by connecting their digital wallets to a DEX.

<figure><img src="/files/NdxJTJ5AyVXpCv2zP9ZS" alt=""><figcaption></figcaption></figure>

The Polygon blockchain offers a fairly wide variety of DEXes with useful features like swapping and trading crypto and staking Matic in liquidity pools for high returns. A key advantage of Polygon is the low transaction fees. Polygon is a Layer 2 solution that operates on top of Ethereum. It aims to address the limitations of Ethereum - i.e. high transaction fees and slow processing speeds.&#x20;

### Key Takeaways for Creators and Collectors

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On the Polygon blockchain, several DEXes allow users to trade cryptocurrencies in a decentralized manner. These DEXes offer a variety of functions, including:

* **High level of security as users maintain control over their private keys**, and trades are executed using smart contracts - there is a much lower chance of hacking attacks
* **Greater transparency in the form of a publicly auditable ledger** which allows users to verify transactions
* **High levels of liquidity** meaning that users can easily buy and sell cryptocurrencies without the need for a centralized order book (though, on average, a CEX will have higher liquidity)
* **Lower fees than centralized exchanges** as they do not require a centralized authority to facilitate trades
* **Opportunity to swap a very wide variety of tokens** as DEXes frequently include a wider variety of tokens than many centralized exchanges
* **Opportunity to earn passive income with high-interest staking** and supplying tokens as collateral to enable borrowing (high-interest DeFi products are risky; DYOR before investing)

*Want to learn more about decentralized exchanges?* Check out some of Polygon's leading DEXes.