yes, the difference is oxygen - "rotting" is anaerobic decomposition, resulting in compounds that aren't desireable for plant health and nutrition and involves different bacterial species than aerobic decomposition, which doesn't generate the smells you associate with "rotting" .... if you do get some smell from a good hot compost pile [the heat generated by aerobic bacteria], it'll smell like ammonia, the off gassing of nitrogen .... the ideal hot compost process will sequester that nitrogen rather than allowing it to gas off or leach in the excess liquids .... the same pretty much applies to the cold composting process in a worm bin, with the feedstock being controlled to prevent heating, but still providing plenty of oxygen .... which may result in a higher fungal population rather than bacteria - there are thousands of strains of microbes that are part of the decomposer community

just need to understand the terms - some folks think what's in the garden is the same as what's in the vacuum bag, but the 1st is soil, the other is dirt :)

Bill