A DEX is usually a matching service or brokerage that functions mostly by code and has few, if any real actors. DEX's usually operate a matched bargain platform. Unlike a CEX, which can act as a broker / custodian, the DEX facilitates trading only. The digital pairs do not include fiat. Many operate on the Ethereum platform. They may also offer other services to improve liquidity such as lending.
The key risks are smart contract risks and governance risks. DEXs require more RDD than a CEX. DEX are growing rapidly because of their speed, anonymity and lower transaction costs. However this presents challenges when things do go wrong.