16 Best Decentralized Exchanges
Due to its speed, openness, and anonymity, cryptocurrency transactions are growing popular. The requirement to utilize a custodian or an intermediary, however, is a typical criticism of bitcoin trading. In order to execute their deals, users must basically relinquish ownership of their assets as well as their contact details. Decentralized finance (DeFi) could provide traders with a more effective answer.
What Is a Decentralized Exchange (DEX)?
A decentralized exchange (DEX) is a peer-to-peer (P2P) market that enables cryptocurrency transactions to be carried out directly between parties. DEXs use smart contracts, or self-executing code, to carry out transactions immediately.
DEXs are fundamentally different from centralized exchanges, or CEXs. CEXs are run by profit-driven organizations and are subject to strict regulation. They frequently provide asset protection, different security standards, and a variety of bank-like services in return for exorbitant fees. On the other hand, the ideal DEX places the user in control of securing assets and has low costs. DEXs are constructed on several blockchains, including Polkadot, Ethereum, and others.
Types of Decentralized Exchanges
Even if there are several DEXs for crypto trading, they can all be grouped into one of three categories: automated market makers, order book DEXs, or DEX aggregators. Direct cryptocurrency trading is supported by all of these DEX variants, however they vary in important ways.
Automated Market Makers
Automated market makers, or AMMs, deal with the crucial issue of DEX liquidity directly. Other exchanges utilize a matching procedure, so before trades can be conducted, buy and sell orders must match. However, AMMs employ liquidity pools to finish transactions right away. For their contribution to the pool, a liquidity provider receives financial rewards, sometimes in the form of transaction fees.
Be mindful that finding the best DEX is frequently based on how much of their entire value is locked. Slippage, which happens when the liquidity pool is insufficient to handle the trades, is a severe drawback for AMMs. Buyers may incur greater expenses as a result of slippage. Inconsistent trading activity between two pairs may potentially result in temporary loss for a liquidity provider.
Order Book DEXs
Order book DEXs work with a booking system that keeps track of all open orders, as suggested by their name. These orders specify the price a trader is willing to sell an item for or the amount they are prepared to pay for it.
Off-chain and on-chain order book DEXs are the two different kinds. Users may keep their money in their wallets and yet place open orders on the blockchain thanks to on-chain order books. The only time the blockchain is utilized is to settle transactions, therefore off-chain order books are needed to keep track of orders. Off-chain order books are typically quicker and less expensive. Order books DEXs frequently experience liquidity issues, especially when dealing with high trade volumes.
DEX aggregators directly address liquidity issues through the use of various mechanisms and protocols. Generally, they pull liquidity from a few DEXs to maintain low swap fees, optimize token products and reduce the risk of slippage. To further address problems with pricing and failed transactions, some of these DEXs add to their liquidity pools with assets from centralized platforms. However, they continue to be noncustodial through varied integrations with multiple CEXs.
What to Look For in a Decentralized Exchange
As you can see, there are big differences between how different DEXs work. These variations may affect your trading experience, risk exposure, transaction costs, and more. It seems sense that you would want to locate the greatest DEX. But how can you tell which option is ideal for you when there are so many to select from?
Increased privacy and anonymity are offered by all DEXs. Users’ privacy is not gathered personally, thus security breaches are not a major worry. Users also have control of their assets, and trading costs are quite low. Some DEXs do, however, levy a network fee.
But there are also a lot of distinctions among different DEXs. DEX aggregators are less worried about slippage and insufficient liquidity. They are thus a good choice for people who are interested in higher trade volumes. There are many possible network costs as well. It’s crucial to comprehend the workings of the many sorts as well as the particular attributes and capabilities of each DEX you’re thinking about when you search for the greatest DEX.
Additionally, stay away from any cryptocurrency exchange with a bad reputation for offering unreliable customer service if you wish to use the finest DEX accessible.
Security & Privacy
The majority of DEXs have privacy-protecting features like self-custody of money. A noncustodial trading platform is essential, especially in view of recent developments in the cryptocurrency industry.
The majority of the leading DEXs don’t use any KYC methods to protect privacy. Effective DEXs should also have governance features and community forums where users may actively participate in discussion and vote on proposals. With these functionalities in place, users are able to provide their recommendations for platform enhancement.
Transaction Cost & Efficiency
The transaction cost and efficiency should be taken into account while selecting a DEX.
Some DEXs provide traders with multiple trading sizes with tier-based fees. Since trading fees and gas costs may mount up, this aids busy traders in maintaining minimal fees and maximizing earnings. Top DEXs additionally provide low-cost order placing and trade processing at quick rates.
Additionally, traders that conduct dynamic transactions across many asset classes, chains, and platforms want to search for DEXs that handle numerous chains.
For traditional and aspiring crypto traders looking to step into DeFi, it’s important to look for a DEX that offers an easy-to-use interface, such as an order book interface commonly found in CEXs, to cut down on time spent learning how to use the platform.
DEXs with a range of trading options, including spot and margin trading as well as perpetual contracts, may be of interest to users. In order to give traders better access to a range of assets and trading pairs, it is crucial that the DEX constantly introduces new trading pairs.
Tokens & Rewards
Tokens and awards are perhaps the most important things for traders to take into account. This is especially true when it comes to how each DEX works to increase prizes and earnings while ensuring that these incentives hold their value over time.
It is crucial for DEXs to give their community members and token holders access to revenue-sharing schemes. This frequently entails the payout of trading commissions accumulated over time. The native coins of the platform are often used to deliver rewards and incentives.
Best Decentralized Exchange Platforms
Days might be spent studying the DEX platforms. However, by concentrating on a couple of the best-rated sites, you may significantly narrow the breadth of your search. You may more quickly decide which decentralized exchange platform is appropriate for you by being familiar with their characteristics.
ApeX Pro, although being a relatively new platform, is praised as one of the greatest DEX platforms because of its elastic AMM model, which increases capital efficiency and simulates a spot trade for every transaction. Additionally, its order book interface makes it easier for newcomers to the cryptocurrency industry to enter the DeFi market.
Since ApeX Pro incorporates StarkWare’s Layer 2 scalability engine, StarkEx, users may access forced requests to collect their funds even when the DEX isn’t operating, therefore security is not a concern. STARK proofs also make it easier to accurately verify transactions. Furthermore, ApeX Pro doesn’t demand a KYC procedure, allowing consumers to better protect their privacy.
With its on-chain algorithms that control the availability of liquidity, as well as rebasing methods and financing fee variations, ApeX Pro achieves a dynamic price peg, akin to algorithmic stablecoins. On the derivatives market, users have access to any token they want to trade with up to 20X leverage. Additionally, they may build liquidity pools, contribute liquidity to any trading pairings, take part in the Trade-to-Earn event to get BANA tokens, and exchange APEX tokens for BANA tokens.
Due to its use of the Protocol Controlled Value (PCV) paradigm rather than the TVL, ApeX Pro differs from other DEX systems (Total Value Locked). In order to prevent liquidity providers from taking all available liquidity at once, PCV helps to ensure that all locked assets in smart contracts are held by the protocol and cannot be removed by users.
ApeX Pro doesn’t yet offer tiered fees, in contrast to more seasoned DEXs. Users may anticipate a VIP program, though, in which the quantity of APEX tokens invested will decide the maker-taker fee reduction offered. Those aggressive traders aiming to increase their earnings will undoubtedly benefit from this. Thanks to StarkEx, consumers may continue to take advantage of some of the most affordable gas prices.
|Order book modelHigh performanceMulti-chain supportLow fees, high leverageSecurity and privacyUser-friendly interface||Relatively new platformDoesn’t yet have tiered fees|
The ideal DEX for you can be Uniswap if collecting interest on your assets is your top objective. This well-known platform, which has a daily average trading volume of more than $4 billion, is the biggest DEX. It is an AMM DEX, and it controls its decentralized liquidity pools by using algorithms to choose the optimal particular swap rate for each trade pair.
You may use pre-existing liquidity pools or build your own using Uniswap. A part of the trading costs is paid to the liquidity providers. Additionally, the platform has DAO governance, which gives people power over running and maintaining it.
|Supports exchanges for more than 400 tokensLarge, established platform with a high trading volumeDAO governancePassive income generation via stakingTransaction fees range from 0.1%–1%||Risk of impermanent lossDoesn’t support fiat money transactions|
One of the best DEXs overall is DeFiSwap. Through smart contracts stored on BNB Chain, formerly known as Binance Smart Chain, it provides liquidity pools. With the help of these automated pools, buyers with liquidity may trade on the cryptocurrency market without having to find a seller. Users may also lock their Defi Coins (DEFC) to create a passive interest stream.
For trading or selling DEFC, DeFiSwap levies a 10% levy, which maximizes earnings for each liquidity provider. The liquidity pools also get a share of this tax. DeFiSwap’s platform is simple to use, and it facilitates the exchange of more than 50 tokens, making it potentially the greatest DEX overall.
|Functionality with > 50 cryptocurrenciesDEFC can be held to generate incomeAutomatic liquidity poolsNo transaction fees or trading fees, except when swapping or selling DEFC||DeFiSwap’s app is still in development|
Curve may be the finest DEX to take into account for busy cryptocurrency traders who are worried about volatility. It functions as an AMM DEX and uses the Ethereum blockchain. Curve emphasizes stability over volatility, in contrast to other AMMs. This lowers the possibility of slippage and results in cheaper costs. By using their voting rights, CRV token holders may also actively engage in governance.
|Supports trade for > 45 tokensLow transaction fee of 0.04%DAO governance for CRV token holders||Platform is more complicated than many other DEXs|
Low-cost liquidity pools, which reduce the possibility of slippage, are a hallmark of PancakeSwap. You will benefit from automated trading if you decide that it is the ideal DEX for you because its liquidity pools are managed by smart contracts on the BNB Chain. CAKE, the native token of PancakeSwap, may be used for yield farming, staking, and voting on governance issues. In addition to receiving a share of the transaction costs, liquidity providers also earn a portion of the assets in the pool.
|Over 50 DeFi tokens offeredLow transaction fee of 0.25%Liquidity pools reduce risk of slippage||Impermanent loss is possible when staking and/or yield farming|
Oneinch enables simple cryptocurrency trading and tops our list of DEX aggregators. It allows users to create virtual balances and benefit from the best pricing by scanning multiple DEXs for each transaction. Users could be charged fees by other DEXs, but 1inch doesn’t have its own costs. The 1inch liquidity pool also enables users to stake tokens and receive rewards in 1INCH tokens. When staked, these native tokens also grant voting rights.
|Over 400 tokens offeredNo transaction feesGovernance voting rights via 1INCHSuperior swap rates||Other DEXs may charge transaction feesNo U.S. regulation|
Even while KyberSwap, the company’s main product, is frequently contrasted with Uniswap, it differs in some important ways. Due to the fact that it utilizes many liquidity pools, this DEX could be the ideal option for you.
Compared to several other DEXs on our list, its liquidity pools are deeper. In fact, many DeFi apps employ KyberSwap as their foundational protocol. When a certain pair is traded, a 0.3% commission is paid to each liquidity provider. The native token of KyberSwap, KNC, is used to settle trade costs. Additionally, user governance and voting rights are supported by the usage of these tokens.
|Supports thousands of swap pairs for more than 1,500 tokensPays a 0.3% transaction fee to liquidity providersOffers staking, DApp solutions and farming||Doesn’ have a mobile appDoesn’t accept fiat deposits|
WX.Network, formerly Waves, makes use of cryptocurrencies like Bitcoin and Litecoin. Its main goals are to create unique coins and to use smart contracts to introduce DApps. Its ICO function permits crowdsourcing in addition to allowing cryptocurrency trading. The platform’s UI is distinctive among other DEX platforms and was created with user friendliness in mind. The fact that WX.Network employs a mix of centralized and decentralized services to reduce slippage is one of its standout features.
|Low risk of slippageUser-friendly interfaceSupports numerous digital assetsBuilt on its own blockchain0.03% trading fee||Isn’t regulated|
Doesn’t support fiat withdrawals
An order book DEX is dYdX. Along with certain unique features, it provides the standard trading environment seen on the crypto market. When trading ETH, for instance, customers may leverage up to 5 times their initial investment.
Users who maintain their assets on the exchange can generate a passive revenue stream thanks to the platform’s provision for cross-margin borrowing and lending. In fact, even trading-active assets can spark interest. Other significant advantages include dYdX’s trading volume, which is second only to Uniswap, and its capacity to effortlessly convert supported assets.
|High trading volumesEasy-to-use interfaceProvides leverage as well as passive income generationHas a mobile appTransaction fees are discounted with increased trading volumeFeatures a 0.1% trading fee||Limited trading optionsDoesn’t support fiat depositsUsers are responsible for Ethereum gas fees|
A DEX aggregator running on the Ethereum blockchain is called 0x. Only Ethereum is used to execute settled transactions, keeping gas prices as low as feasible for customers. Relayers are used by 0x to increase interest in orders. Upon the conclusion of trades, these relayers are paid a ZRX charge. One of the key contributing causes to 0x’s appeal is its distinctive structure. In order to offer AMM liquidity, 0x makes use of a number of supporting DEXs, which lowers the likelihood of slippage loss. On Ethereum, users may buy, sell, and exchange the majority of assets.
|Supports both fungible and non-fungible tokensMany asset pairs available for tradingPremium interfaceSearch engine function allows token trades to be executed at the best pricesStaking pools available for passive income generationLow trade fee of 0.02%||Some user complaints related to coding issuesUsers responsible for Ethereum gas fees|
IDEX is a blockchain-based exchange that allows real-time trading exclusively in the cryptocurrency market. This DEX is the best for active traders with big trading volumes since users may execute many deals at once. There are no petrol costs associated with cancellations. Order types include market and limit.
With cutting-edge security features, the platform is exceptionally secure. In addition, IDEX uses both centralized and decentralized exchanges to facilitate transactions and improve security. Users may stake their assets through a straightforward method to create a passive income stream for further financial gain.
|Supports 26 tokensMinimal risk of security breaches with encrypted tradesPassive income generation possible via stakingGas-free cancellationsOffers both market and limit ordersSupports high trading volumeMaker transaction fee of 0.1%, taker transaction fee of 0.2%||Users must confirm trades via private keysComplex interfaceComplaints of poor customer support for digital currenciesDoesn’t support fiat currencies|
Completely decentralized exchange AirSwap is very new to the DEX market. However, it has distinguishing qualities that can make it the best DEX option for you. Users are liable for Ethereum gas expenses since AirSwap relies on the Ethereum network. However, there are no transaction fees with AirSwap.
Users are able to trade any common ERC-20 tokens using the native token, AST. For a better user experience, deposits and withdrawals are processed instantly. A realistic transaction tracker and a simplified user interface are other features of the AirSwap architecture. In order to lessen the danger of security breaches, users hold money in their wallets until transactions are completed.
|No AirSwap transaction feesLow risk of security breaches||Relatively new platformP2P trading only completed when a suitable trader has been locatedOther exchanges may charge separate fees|
An aggregator called DEX.AG uses liquidity pools from a few of the other DEXs on this list. DEX.AG assists customers in finding the best trading rates by researching these exchanges before making deals. As a result, it gives you an easier approach to find the greatest deals, saving you time and effort when making transactions. Although these other exchanges may charge consumers transaction fees, DEX.AG doesn’t have its own costs.
|No DEX.AG transaction feesSuperior user interface||Other DEXs may charge their own transaction feesPoor customer support|
An Ethereum-based DEX called Balancer uses liquidity pools and smart contracts to swiftly execute deals. Balancer, an AMM, offers its consumers a variety of liquidity pools. You can get staking incentives for generating passive revenue if you supply liquidity on Balancer.
Users can create their own liquidity pools in addition to adding assets to existing pools, which are formed for this purpose. A smart pool, a communal pool, and a private pool are the three sorts of pools that may be built. It is noteworthy that despite the platform’s usage of the Ethereum blockchain, users may execute gas-free transactions by signing messages. The Balancer-Gnosis-Protocol supports this feature.
|Gas-free transactionsSuperior control and functionality for pool owners||Variable transaction fees, established by pool owners, of between 0.0001% and 10%|
One of the first AMMs to operate on the Ethereum blockchain, Bancor was founded in 2017. Trading is quickly completed with automated liquidity. For many traders, this feature may make Bancor the greatest DEX, but the platform also has other advantages. Its own token, BNT, makes transactions quick and simple.
Staked tokens avoid impermanent loss. A number of liquidity pools allow for staking. Due to its outstanding incentives for both staking and BNT donations, Bancor also joins this list of the top DEXs. Those that stake their BNT and other crypto assets concurrently will receive the best profits. The exchange site utilized has different exchange costs.
|Established platform that’s evolved with upgrades over the yearsSupports single-sided transactionsExchange fees are low and may range from 0.08% and 0.75%Impermanent loss protection||Users must keep assets in the Bancor walletMay be challenging to use for those who are unfamiliar with EthereumDoesn’t support fiat currency|
SushiSwap, which developed from Uniswap, is a fantastic DEX for many reasons. Through Uniswap, its source code is forked. Additionally, by staking its native token, SUSHI, users may get governance advantages in addition to passive revenue. The DEX architecture’s singular design lessens market concentration. Users have the opportunity to build a liquidity pool for a small fee or use an existing liquidity pool to conduct rapid, hassle-free swaps.
SushiSwap is unique in that it also has a distinct “sushi” motif throughout its aesthetics and terminology.
|Low transaction fee of 0.3%Easy-to-use interface that’s suitable for novicesFunctions with most Ethereum-based tokens||Complicated rewards structure|
Even if there are a lot of DEXs to select from, it makes sense to carefully examine the options to choose the finest decentralized exchange for your cryptocurrency market activity. There is a lot of flexibility in terms of fees, supported tokens, incentive methods, functioning with big trading volumes, interfaces, and more, so you may select a platform that meets your requirements and exceeds your expectations. Consider saving time and effort by focusing your search to some of these top possibilities while you seek for the best decentralized exchange.