Let’s look at trading for a simplified illustration. A decentralized exchange (DEX) will settle trades on-chain whereas a centralized exchange will use an internal centralized system. This is important because if you, for example, use a DEX to swap Solana (SOL) for Helium (HNT) your HNT that you receive to your wallet will be verifiable on a transparent ledger. Contrast that to people in 2022 who were trading Solana for Helium on FTX. The tokens they received were kept on a centralized ledger, verifiable (or not) only by FTX internally. And when FTX went under, it turned out that those tokens did not actually exist. It’s difficult to know who to trust. That’s why on-chain smart contracts are so important. Creating a self-enforcing, self governing system is the best way to mitigate bad actors and make a safer environment for all participants.