Many people wonder how decentralized exchanges actually work. Built on Ethereum, certain DEX protocols have become the backbone of peer-to-peer trading. They let users swap assets directly without relying on centralized intermediaries, eliminating middlemen from the equation. The magic? Automated market making. Instead of order books and traditional matching, these platforms use liquidity pools where prices adjust algorithmically based on supply and demand. It's a fascinating proof of concept—entire financial markets operating transparently on code, no gatekeepers required. That shift from traditional finance to code-driven systems is reshaping how we think about markets.