A Decentralised Exchange (DEX) is a peer-to-peer marketplace which allows users/traders to trade assets between themselves, without the need for any third parties.
There are 3 types of Decentralised Exchanges: AMMs, Aggregators and Order Book DEXs. When a transaction has been made on a DEX the transaction will be sent through to the smart contract, which guarantees the finality of your transaction, securely! Where does the money come from? Simple answer, Liquidity pools!