In summary:
With custodial or "normal" exchange trading, you send over your funds to wallets these exchanges control. Making trades instantaneous, but leaving your funds more susceptible to hacks.
This post by @mk4 pretty much sums everything up about trading on decentralized (or DeFi) exchanges and the centralized ones. It's worth noting that trading on DeFi exchanges (aka token swaps) offers more control to the user and puts the power back in the hands of the community. Most DeFi DEXs have governance to maje sure of that.
defi hypes a lot for now, so as for me, huge volumes helps to earn more. But still defi platfroms are too young and unstable, so i prefer to use traditional trading. besides, just cex.io just announced Defi platform and there will be a possibility to purchase defi tokens with fiat money
True that. DeFi is currently being hyped the same way ICOs were hyped back in 2017 and early 2018. So if it's a bubble, It'll eventually gets burst. I've seen some ridiculous APYs which I think won't be sustainable in the long run.