Decentralized Exchanges or DEXs are blockchain-based apps that let individuals trade cryptocurrency in a non-custodial way rather than the traditional method of serving as a financial middleman among market participants.
Platforms can have a wide variety of infrastructure and system designs. Many crypto DEXs have liquidity pools, novel order books, and DeFi features, such as consolidation tools for unique and innovative investment products.
DEXs often replace traditional exchange order books with liquidity pools and AMMs, which pair buyers and sellers depending on order prices and volume. These are pools of cryptocurrency assets that remain under the exchange’s surface, waiting to clear any buy or sell order. The funds in the pool come from investors who deposit money to profit from transaction costs payable to pool users.
Let us now take a look at the 9 best decentralized crypto exchanges to choose from.
9 Best Decentralized Exchange (DEXs)
Here is a list of the best decentralized crypto exchange:
Let us take a closer look at each of the best decentralized exchanges.
The 1inch exchange is one of the best-decentralized exchanges. Rather than acting as an exchange, it aggregates DEXs for some of the best cryptocurrency rates and helps dealers avoid slippage. Slippage happens when inadequate trading activity causes an asset to be purchased for more than it was initially planned or sold for less than it was previously meant due to a lack of trading volume.
As of now, 1inch offers over 188 liquidity providers from 7 blockchains, 1.6 million users, and above USD 134 million in transactions.
1INCH is an Ethereum token that supports 1inch, a decentralized exchange aimed at providing the best prices by locating the most optimal exchange routes among the best-decentralized exchanges. 1inch and other DEXs allow users to trade tokens without the necessity of a middleman. To discover the cheapest pricing for customers, 1inch converges token values from other DEXs.
Why is 1inch One of the Best Decentralized Crypto Exchanges?
- It could provide you with better prices than many of the main exchanges, depending on the currency pair you are dealing with. If doing so offers you a better value, it could split the trade across many exchanges.
- All ERC-20 tokens, which are digital assets that operate on the Ethereum network, are tradeable on 1inch.
- Depending on the browser you’re using, 1inch is compatible with a number of wallets, including 1inch Wallet, MetaMask (which connects to hardware wallets such as Trezor and Ledger), Ledger, Binance Chain Wallet, and many others.
- You won’t ever have to pay fees to withdraw or transfer your cryptocurrency because 1inch doesn’t store your assets on its servers.
Balancer is a decentralized cryptocurrency exchange (DEX) that lets users trade cryptocurrency tokens in dedicated pools. It allows liquidity providers (LPs), portfolio managers, and traders to profit from arbitrage possibilities throughout the exchange’s network and receive incentives for their holdings.
The Balancer protocol is powered by the Balancer (BAL) Ethereum token. It enables anybody to build or contribute liquidity to trading pools while earning adjustable trade fees.
Why is Balancer One of the Best Decentralized Crypto Exchanges?
- A range of pool designs may be accommodated by the exchange that makes use of the Vault.
- Unlike its rivals, balancer features pools with predetermined criteria like those that provide modification.
- The Balancer pools’ smart contracts, which govern how traders exchange tokens, are what power the exchange.
- By signing messages, traders may exchange tokens and benefit from gas-free transactions thanks to the Balancer Gnosis Protocol (BGP).
Even before the term “DeFi” was introduced, Bancor launched some of the very first AMMs on Ethereum in 2017. Without an intermediary to the deal, Bancor enables users to immediately exchange two tokens. All of this is completed inside the Bancor wallet, and thanks to this approach, Bancor is able to offer traders automatic liquidity for deals. Undoubtedly, this makes Bancor one of the best decentralized exchanges.
More significantly, it permits the network to continue to be entirely decentralized, and a large portion of the network’s functioning is made possible by the creative use of the BNT token to ease transactions.
The most recent version of the protocol, Bancor v2.1, provides liquidity providers with a number of important features, namely single-sided exposure as well as impermanent loss (IL) protections. The network-wide expense of temporary loss is covered by the Bancor protocol using fees from its co-investments of BNT tokens in pools. Although some pools could offer moderate costs and high IL, others might have the opposite.
Why is Bancor One of the Best Decentralized Crypto Exchanges?
- When liquidity providers (depositors) stake their tokens, the special features of the Bancor protocol prevent them from suffering temporary loss.
- Your inert crypto-assets can be staked in a variety of accessible liquidity pools thanks to the Bancor network’s support for several Ethereum-based tokens.
- With the help of Bancor, market makers and takers are no longer necessary for single-sided deposits. So, you don’t have to be concerned about the bid and ask for the price of your crypto asset.
- Depositors who contribute liquidity are rewarded handsomely by Bancor, while depositors who contribute BNT receive much greater incentives.
Russian scientist Michael Egorov founded Curve Finance, a decentralized exchange built on Ethereum. By only allowing liquidity pools composed of similarly behaved assets, it provides a very efficient means to swap tokens while preserving low costs and little slippage.
Why is Curve One of the Best-Decentralized Exchanges?
- Firstly, the Curve model, which is more conservative than other AMM models in that it minimizes turbulence and volatility in favor of predictability, serves as crucial support for a broad and resilient asset market.
- Secondly, the assets from Uniswap have recently been transferred to SushiSwap, another DEX. Curve Finance now holds the top spot on the DEX rankings as a result of this.
Curve Finance, which has only been around for a year, is now ranked third among DeFi platforms in terms of the total amount held. It became a decentralized autonomous organization (DAO) after the latest announcement of its native token, CRV.
PancakeSwap, the first and biggest crypto DEX system built on Binance Smart Chain, went live in September 2020. (BSC). It is based on the BSC and uses automated, entirely algorithm-run permissionless liquidity pools.
The automated market maker (AMM) provides consumers with a variety of cutting-edge techniques to monetize their cryptocurrency holdings. This covers yield farming, staking, and token exchanges.
The expensive fees and sluggish network transactions are among the mounting criticisms about projects based on Ethereum. However, PancakeSwap utilizes the BSC network and BEP-20 currencies rather than the Ethereum blockchain.
Why is PancakeSwap One of the Best-Decentralized Exchanges?
- Compared to an Initial DEX Offering (IDO), PancakeSwap enables users to buy the tokens of up-and-coming early-stage businesses before they are made available to the general public.
- Participants of PancakeSwap are given the opportunity to increase their return by staking approved liquidity provider (LP) tokens in one of the platform’s many yield farms.
Established on the Ethereum blockchain, SushiSwap is a decentralized cryptocurrency exchange (DEX). It seeks to develop from Uniswap, the most well-known Ethereum-based DEX on the market.
SushiSwap is a source-code fork of Uniswap that the fictitious Chef Nomi developed. It included important community-oriented functionalities including staking incentives and governance through its SUSHI coin.
Why is SushiSwap One of the Best-Decentralized Exchanges?
- The architecture of SushiSwap serves to reduce market centralization.
- Anyone may exchange tokens and increase liquidity for pools using the platform.
- The fact that most costs are returned to users is one of SushiSwap’s main advantages. For their additional efforts, liquidity providers are generously compensated.
- Compared to centralized exchanges, SushiSwap fees are less expensive. Users of SushiSwap particularly pay a charge of 0.3% when they establish a liquidity pool.
- Users have the opportunity to vote on any significant updates and protocol modifications via SushiSwap’s community governance system.
- SushiSwap was able to grow swiftly thanks to both user and market support.
UniSwap is one of the most popular decentralized cryptocurrency exchanges that enable simple cryptocurrency token exchange without requiring account registration. Through Uniswap’s liquidity pools, you may also earn income on your cryptocurrency investments.
As you might have guessed already, the swap feature of Uniswap Exchange is one of its best features. With a few quick clicks, you can quickly switch any two Ethereum (ERC-20) assets. The swap function is quite practical since it enables asset trading without requiring you to sign up for an exchange account or have your identity confirmed.
Why is UniSwap One of the Best Decentralized Crypto Exchanges?
- Any two Ethereum assets (ERC-20) can be swapped with ease since it enables asset trading without requiring you to have an exchange account or have your identity verified.
- The foundation of Uniswap Exchange is its liquidity pools, which also serve as one of the main attractions for people wishing to earn interest in their assets.
- The more you deposit, the better your returns will be because fees are paid proportional to your deposits.
8. Covo Finance
Covo Finance is a decentralized finance (DeFi) platform that aims to simplify financial services for individuals and businesses. It is built on the Ethereum blockchain and provides a range of financial products such as lending, borrowing, and staking.
One of the unique features of Covo Finance is its ability to aggregate liquidity from multiple sources, including centralized exchanges, decentralized exchanges (DEXs), and liquidity pools. This allows users to access a larger pool of liquidity and get the best possible prices for their transactions.
Covo Finance also offers a governance token called COVO, which allows token holders to participate in the decision-making process of the platform. This includes voting on proposals and shaping the future direction of the project.
Why is Coco One of the Best Decentralized Crypto Exchanges?
- Covo Finance aggregates liquidity from multiple sources, including both centralized and decentralized exchanges. This allows users to access a larger pool of liquidity, which can lead to better prices for their transactions.
- It offers low fees compared to some other DEXs. This can make it a more cost-effective option for users.
- Governance Token: Covo Finance has a governance token (COVO) that allows users to participate in the decision-making process of the platform. This gives users a greater sense of control and influence over the platform’s development.
- It is designed to be user-friendly, with an intuitive interface that makes it easy for users to navigate and execute transactions.
- Covo Finance offers a range of financial products, including lending, borrowing, and staking. This can make it a one-stop shop for users looking to access different DeFi services.
9. Kyber Swap
Kyber Swap is a decentralized exchange for crypto built on the Ethereum blockchain. It allows users to swap one cryptocurrency for another in a decentralized and secure manner. Kyber Swap uses an automated market maker (AMM) system, which means that trades are executed based on a formula that calculates the ratio of the two assets being traded.
One of the benefits of Kyber Swap is that it offers a wide range of cryptocurrencies for trading, including some of the most popular cryptocurrencies like Bitcoin, Ethereum, and USDT, as well as a number of lesser-known altcoins. This means that users can easily trade between different cryptocurrencies without having to go through a centralized exchange.
Another benefit of Kyber Swap is that it is designed to be user-friendly and easy to use, even for those who are new to cryptocurrency trading. The platform has an intuitive interface that makes it easy to execute trades, and it also offers a range of helpful tools and resources to help users get started.
Kyber Swap also offers a competitive fee structure, with low trading fees and no hidden fees or charges. This can make it a cost-effective option for users looking to trade cryptocurrencies.
Why is Kyber One of the Best Decentralized Crypto Exchanges?
Kyber Network is often considered one of the best decentralized cryptocurrency exchanges due to several reasons:
- Kyber Network supports a wide range of cryptocurrencies, including some of the most popular ones like Bitcoin, Ethereum, and USDT, as well as a range of lesser-known altcoins. This allows users to trade between a variety of cryptocurrencies without having to go through a centralized exchange.
- Kyber Network has high liquidity due to its Automated Price Reserve (APR) system, which ensures that the exchange always has enough liquidity to execute trades. This means that users can execute trades quickly and at competitive prices.
- Kyber Network has a competitive fee structure, with low trading fees and no hidden fees or charges. This can make it a cost-effective option for users looking to trade cryptocurrencies.
- Kyber Network is a decentralized exchange built on the Ethereum blockchain, which means that it is secure and resistant to hacking attacks. Users have full control over their funds and do not have to rely on a centralized exchange to hold their assets.
- Kyber Network has an intuitive and user-friendly interface, making it easy for users to execute trades and manage their cryptocurrency assets.
- Kyber Network is integrated with a range of other platforms, including wallets, dApps, and other DeFi platforms, which allows users to access the exchange from multiple different platforms.
The Way Ahead for Decentralized Exchanges
Despite the popularity of UniSwap and SushiSwap, it’s critical to realize that each DEX protocol combines AMMs in a unique way, serving various user types.
The development of new mechanisms and enabling technologies will probably continue to increase as the crypto DEX industry develops. DeFi infrastructure, especially DEXs, will continue to grow and spread to other blockchain ecosystems even while the majority of DeFi activity is currently happening on the Ethereum network.
All of this is evidence of the DeFi industry’s ongoing development and function.