RecordCoin.io
If we talk about buying and selling cryptocurrency assets, the first thing that comes to mind is decentralization, that is, independence from intermediaries and full control over your assets. Unfortunately, this can not always be said about cryptocurrency exchanges. There are centralized exchanges (CEX), which are in fact copies of traditional banks, and decentralized exchanges (DEX), which we have just mentioned. After the collapse of the FTX exchange, users of the network began to think better about which exchanges to choose to store their assets. So today we are going to talk about how DEX works and which decentralized exchanges are best to choose.
What are DEX
So, decentralized exchanges provide a platform that allows users to exchange assets without using a third party to hold your assets. In DEX, the third party is a blockchain or distributed ledger. Blockchain uses smart contracts that are designed to guarantee the transfer of an asset through transactions or return it in case of contingencies. Blockchain technology allows users to have more control over their assets and ensure transaction transparency.
The difference from the centralized exchanges
In contrast to CEX, in decentralized exchanges there are no accounts, and with them the various rules of identity verification. Instead they use cold or hot wallets such as MetaMask, which connects directly to the decentralized exchange. This method is much safer and, most importantly, completely anonymous, because decentralized exchanges do not need any of your personal information.
The best decentralized exchanges
When we understand the differences between exchanges, go directly to our list. In this top, we have gathered 10 of the most popular and trustworthy decentralized crypto exchanges.
1)Uniswap
The leader in the list of decentralized exchanges is Uniswap. The platform was founded in 2012 by Heden Addams. The exchange is built on the Ethereum blockchain, which allows users to exchange tokens based on the Ethereum chain. Uniswap is classified as an automated market maker (AMM). This means that the exchange doesn't need a central controlling authority over orders. Instead, it uses smart contracts to set prices and execute trades. Uniswap can provide cryptocurrency trading because of its liquidity pools. Uniswap takes a small commission on each transaction and distributes it to the pool's liquidity providers (the people who contributed their cryptocurrency to the pool).
Liquidity Mining
Uniswap works by using crypto funds from its users. These funds are stored in liquidity pools, with each pool containing a couple of cryptocurrencies. Anyone can put their cryptocurrency into these pools and become a liquidity provider, through which you can make money. This is called liquidity mining. Uniswap charges a small fee for each crypto transaction and it distributes that fee to all the liquidity providers for that pool.
Advantages
Easy to use
Wide range of different tokens
You can earn money by mining liquidity
Disadvantages
Does not accept fiat money
Gas fee
2)DyDx
Decentralized exchange DyDx is one of the largest decentralized exchanges. You must connect to DyDx with a web3 compatible wallet such as MetaMask, or a hardware wallet through MetaMask. Since DyDx works as a margin trading platform, there are really only three assets that you can exchange with the platform, namely Ethereum (ETH), Dai (DAI), USD Coin (USDC). However, if you have many more options, you are just buying a position, not an asset.
Platform Feature
The best feature of the DyDx platform is its margin and open-ended trading, as this is the main feature of the exchange. Users can trade on margin with up to 100x leverage, while there are dozens of crypto assets to choose from for open-ended trading. Moving many of their transactions to the Level 2 solution provided by StarkWire has resulted in almost all of the transactions you perform on DyDx, including asset exchanges and buying or selling perpetual payments, requiring no gas fees.
Earnings on the platform.
Once you contribute your assets to the platform, regardless of your intentions, you can start earning interest on your deposits, and stable coins give you about 5% per year in interest.
Advantages
Dynamic interest rates
Earn interest on deposited assets and competitive loan rates
No gas fees for most transactions
Disadvantages
Only 3 assets available for swaps
Limited choice for margin pairs
3) Curve Finance
The decentralized exchange Curve Finance launched in January 2020. Curve Finance, also known as the "DeFi backbone," like other AMM exchanges, specializes in liquidity pools. These are smart contracts containing more than two assets in equal amounts that users can exchange through the platform by connecting with a Web3 wallet. The reason it is known as such is because many DeFi protocols use Curve Finance for liquidity. Many of them design their protocols with Curve Finance in mind, making it a key component in those protocols.
Curve Finance provides the ability to earn income in CRV tokens by depositing collateral into any of the seven available liquidity pools.
Features of Curve
Multiple Liquidity Pools: You can choose the pool that best suits the risks you want to take and the coins you are interested in.
Quick wallet connectivity: Connect quickly without the hassle or fuss of using multiple wallets compatible with Curve.
Lots of statistics: You can see daily stats, coin volumes and even cross-pairs in just a few clicks.
Advantages of
Fast AMM protocol
Low commissions
Disadvantages
Highly dependent on Ethereum blockchain
High gas fees
No mobile app
Interface is difficult for new users
4) Pancake Swap
Probably the cutest design goes to PancakeSwap today, a decentralized exchange sponsored by the notorious Binance. That's why PancakeSwap is built on BSC, which offers faster transactions and lower fees compared to Ethereum. The platform has hundreds of tokens, yield farms, liquidity pools, lotteries and more. This exchange has an intuitive interface and offers one of the broadest feature sets you'll find in a decentralized exchange. However, it only supports tokens hosted on the Binance Smart Chain or BEP-20 network. You cannot trade some popular tokens such as Bitcoin and Litecoin.
Earnings from providing liquidity
PancakeSwap allows you to grow your SACE management token. Cultivation is a way to earn interest on your crypto assets by contributing them to liquidity pools. PancakeSwap gives you access to various pools known as "farms" with interest rates above 10%.
Benefits of
Staking support.
Support for most Web3 wallets
Low transaction fees compared to Uniswap
Disadvantages
No mobile app
You can't trade BTC and other tokens, different from BEP-20
5)Balancer
Having been in development since 2018, Balancer was launched in March 2020 and quickly came to the forefront of the cryptocurrency space. Balancer has quickly established itself as one of the leading DEX platforms in both trading volume and fixed value among other metrics.
Platform Features
The Balancer platform rewards investors who contribute assets to incentivized liquidity pools with dividend payments on liquidity mining BAL tokens. Balancer has a wide range of pools that facilitate the exchange of tokens for the exchange network. The platform has a built-in portfolio manager, which will be convenient for viewing your investment statistics. In the new trading interface of the Balancer-Gnosis-Protocol (CowSwap) platform you can take advantage of free subscription deals (no gas required), Miner Extractable Value (MEV) protection and the best rates on DeFi exchanges.
Benefits of
Weighted pools of up to 8 token types
Built-in portfolio manager
Protocol Warehouse: Protocol Warehouse reduces gas costs by reducing the number of transfers needed between individual pools to complete a transaction.
Disadvantages
No mobile app
Risk of hacking: Balancer suffered a major hack in June 2020, resulting in the theft of $500,000 worth of tokens.
6)ShibaSwap.
Launched in July 2021, the ShibaSwap exchange can provide all the same features as many of the decentralized exchanges mentioned above, such as various liquidity pools, token exchanges. On top of that, the ShibaSwap exchange has features such as stacking and a huge variety of non-mutually exchangeable tokens (NFTs). ShibaSwap is a popular decentralized exchange of the famous Shiba.inu coin project, a popular meme coin that is the main competitor of Dogecoin.
Features of the exchange
ShibaShop ecosystem has 3 main tokens of ERC-20 standard: Leash, Shib and Bone. SHIB tokens are the main tokens that run on the Ethereum blockchain, which are used to sell, settle and store on the wallet. LEASH is an incentive token for farming pools. The BONE token allows users to receive rewards for maintaining liquidity. This mechanism is called Dig. The payout percentage depends on the number of SHIB tokens blocked in the pool. All liquidity providers are rewarded with BONE for trades on the exchange in proportion to their funds in the pool. BONE can also be used as a management token. This token gives you the opportunity to vote for changes within the ShibArmy community.
To start using the ShibaSwap platform, users need to set up one of three compatible cryptocurrency wallet services: Metamask, WalletConnect, Coinbase Wallet.
Advantages of
User-friendly interface
Quick transactions
High liquidity.
Disadvantages
Support for only 3 Web3 wallets
Limited cryptocurrency options: ShibaSwap offers a limited number of cryptocurrencies to trade, which may not be suitable for users who want to trade a wider range of assets.
7)JustSwap.
Compared to the previous cute exchanges before it, this one seems much more serious. JustSwap is a decentralized exchange (DEX) that was launched in the "Year of DeFi" 2020. JustSwap is also an automated TRON-based liquidity protocol that allows users to instantly exchange TRC20 tokens in a decentralized way.
Features of the platform
JustSwap has a trading commission of 0.3%, so you will pay 0.3% trading commission when exchanging TRC20 tokens on the platform. The trading commission paid by traders who exchange tokens on the platform goes directly to liquidity providers, and no additional fee is charged. In this sense, JustSwap's commission mechanism is broadly similar to that of other liquidity protocols such as Uniswap. JustSwap supports TronLink, which is one of the most popular TRON wallets. It works as a browser extension and can be installed from the Chrome Web Store.
Benefits of
Fast Transactions: JustSwap uses the TRON network to execute transactions, ensuring fast and inexpensive transactions.
Fast TRON-based transactions
High liquidity.
User-friendly interface
Disadvantages
Support for only one TronLink wallet
Only TRC 20-based tokens are available for trading.
8)QuickSwap(V3)
QuickSwap(V3) positions itself as the best decentralized exchange on the Polygon network. It is a new version of the original QuickSwap exchange, which was launched in 2020, based on Ethereum and running on Polygon's scalability infrastructure. The move to Polygon has made transactions much faster and commissions smaller. Quick swap (V3) offers a fast, secure and easy-to-use platform for trading a wide range of cryptocurrencies and decentralized finance (DeFi) tokens.
Features of the exchange
You can trade any combination of ERC-20 tokens on the exchange. Just like on other exchanges, you can earn on liquidity pools, and in addition you can earn on LP tokens. The downsides include support for only one Web3 wallet WalletConnect.
Advantages of
You can use fiat money
Fast transactions thanks to Polygon network
High liquidity.
User-friendly interface
Disadvantages
Dependence on Ethereum
Only 1 Web3-wallet support
No stacking support
9)ApolloX
The penultimate exchange in our top list is AppolloX. This is a relatively new cryptocurrency exchange, which was developed in 2021. This exchange was developed by experts with experience in fintech institutions and companies. The name of the exchange symbolically means the first successful mission to land a man on the moon.
Features of the exchange
The main feature of the exchange is that it can be traded both centrally and decentralized through two versions of the platform. Either platform provides a safe and secure trading environment. The exchange pays you $5 for each person brought to the platform, and the exchange also offers earnings based on commissions from trading pairs. The exchange has both futures and spot trading. The cryptocurrencies that ApolloX supports include its own cryptocurrency wallet, Metamask, Binance Wallet, Trust Wallet, WalletConnect, Coinbase Wallet, etc. So you can choose an exchange depending on your preferences, without losing the benefits of both types
Advantages
High security
User-friendly interface
Got mobile app
Easy switching between CEX and DEX
Disadvantages
Low trading volume
Very small amount of cryptocurrencies
Slow support
10)SpookySwap
Closes our list of exchange SpookySwap, which is a decentralized AMM exchange for Fantom Opera network - the first and only one in the world. The platform uses a token with the ticker BOO as a control token and places pools of liquidity and rates of its native token. It is a fairly new DEX, launched in April 2021.
Features of the exchange
Of the wallet support, only Metamask can be highlighted. SpookySwap does not charge any transfer or withdrawal fees other than network fees. That said, SpookySwap is not free. They charge a flat fee of 0.20% per transaction, whether you are a maker or a taker, which is basically a liquidity provider fee. SpookySwap, like most all DEXs, does not accept deposits in fiat currency, and you cannot buy cryptocurrency on their platform. Like other exchanges, you can make money on liquidity provision here.
Advantages of
No transaction fees other than transfer fees
Opportunity to earn on liquidity
Fast speed of transactions
Disadvantages
Does not accept fiat money
Small user base
Limited amount of cryptocurrencies
Withdrawal
I think that those exchangers which were in this top, will be enough to decide which one is right for you. All of these exchangers have their own features and disadvantages, but all of them are definitely worth your attention. Decentralized exchangers are relatively new on the market, but in this small period have been able to move forward. In the future, there will be more features on these exchanges and the appearance of exchanges built on faster blockchains.