Let's break down how decentralized exchanges actually work. Unlike traditional platforms, DEXs enable you to trade cryptocurrency directly from your personal wallet without relying on intermediaries. Popular protocols handle this by matching buyers and sellers through onchain mechanisms—it's all transparent and trustless.

But there's a real challenge here: fragmentation. Most DEXs operate independently, each with their own liquidity pools and user bases. You might find better prices on one platform for an ETH pair, yet discover deeper liquidity elsewhere for a different token. This siloed structure means traders often need to hop between multiple protocols just to find optimal execution. It's inefficient, costly in gas fees, and frankly, it slows down the entire DeFi ecosystem's potential to compete with centralized alternatives that consolidate liquidity at scale.