During the early stages of cryptocurrency, centralization was still a significant aspect of the sector. While crypto projects sought decentralization, users could only trade assets on centralized exchanges (CEXs). Over the years, developers tried to build decentralized exchanges (DEXs), but these attempts were largely unsuccessful. The main issue with DEXs back then was the need for more liquidity.
This changed with the launch of Uniswap, which started using Automated Market Maker (AMM) to build up liquidity. Suddenly, a new era of DEXs started, and today, there's a wide selection of DEXs. This guide will explain what DEXs are and how they work. It will also include a list of some of the best decentralized exchanges available.
What is a decentralized exchange?
Decentralized exchanges are peer-to-peer (P2P) swapping platforms not run by a centralized entity. DEXs are similar to centralized platforms in some ways but, for the most part, are significantly different. Some of the major differences include that they are not owned and operated by a single entity. They do not require you to deposit funds into their wallet to trade. In other words, they are non-custodial trading platforms.
DEXs also only offer assets that run on the same blockchain as the exchange. However, cross-chain DEXs can also use assets from different chains. Decentralized exchanges are run via smart contracts and do not require order books to match traders. Instead, they use AMMs and liquidity pools from where they draw the funds offered by other users. DEXs also tend to provide significantly lower trading fees and greater security.
The 19 best decentralized exchanges available right now
The first on the list of the best decentralized exchanges is Uniswap — Ethereum's first and largest DEX. Uniswap is a strong choice for those who wish to grow their assets. The platform is extremely popular; its average daily volume often exceeds $4 billion. As an AMM DEX, Uniswap manages its decentralized liquidity pool through an algorithm. Its purpose is to determine the best swap rate for each trading pair.Customers can use established liquidity pools or even create their own. Those who provide liquidity — liquidity providers — earn by receiving a portion of the trading fees. The platform is entirely governed by a decentralized autonomous organization (DAO), meaning its users are in control.
Offers more than 400 tokens
A large, reputable, and established exchange platform
High trading volume
Users can generate passive earnings through staking
Transaction fees from 0.1% to 1%
No fiat transactions
The risk of impermanent loss is always present
2. OKX DEX
Next, we have OKX DEX — a cross-chain, multi-chain DEX aggregator that aims to provide users with the optimal transaction from across 20+ chains, 300+ DEX and 200,000+ coins. OKX's DEX features a decentralized, borderless trading platform that is secure and non-custodial.
The OKX DEX can offer a seamless trading experience and relatively low trading fees. Its chain focuses on providing a better, more dedicated infrastructure than Ethereum. This makes it an attractive option for DApps, DEXs, and other blockchain products.
Great exchange rates
Order matching through a call auction mechanism
Low liquidity for certain cryptocurrencies
Commissions are not displayed until the order is created
3. ApeX Pro
ApeX Pro is known as one of the best decentralized exchanges due to its elastic AMM model. This model improves capital efficiency and makes transactions feel like spot trading. It also features an order book interface, which makes it easier for beginners to use. The platform integrates StarkWare's layer 2 scalability engine, contributing to the exchange's security. If the DEX is ever out of service, traders can use the engine to retrieve their funds. It even features up to 20x leverage for any token on the derivatives market.
Security and privacy
Order book model
Limited trading instruments
It doesn't have tiered fees
Curve is one of the best DEXs for traders worried about volatility. Curve is another AMM DEX, and like Uniswap, it uses Ethereum's decentralized network. However, it's also unique in some aspects. It features its token, CRV, which is used for governance by granting voting rights to its holders.
Offers over 45 tokens
Transaction fees are at around 0.04%
Token holders get to vote on important decisions
A steep learning curve due to complex interface
High gas fees
Fifth on the list of the best DEXs is KyberSwap. This is the flagship product of the Kyber Network. Commonly compared to Uniswap, this is also an AMM DEX, although it has some features that make it stand out. The exchange platform operates with multiple liquidity pools. Furthermore, its pools are more profound than most other DEXs. This is why numerous DeFi applications use KyberSwap as their underlying protocol. The platform rewards each liquidity provider with a 0.3% fee when a specific pair is traded. All rewards and trading fees are paid in KNC, the exchange platform's native token.
Supports over 1,500 tokens
Thousands of available swap pairs
Liquidity providers receive a 0.3% fee
Offers staking, farming, and DApp solutions
No fiat deposits
No mobile app
May be difficult for new traders to use
Unlike most other DEXs, dYdX is an order book DEX. As such, it offers a more traditional crypto market trading experience. However, it does still have some unique features. One is leveraged trading up to 5x the invested amount if users go long or short on ETH. The platform is also known as lending platform. It features cross-margin lending and borrowing. This lets users earn passively if they leave their funds on the platform. Assets that are actively used in trading can also generate interest. Also, dYdX's trading volume is second only to Uniswap.
Second-highest trading volume among DEXs
It has a mobile app
The trading fee is only 0.1%
Offers trading with leverage
It lets you generate passive earnings in multiple ways
No fiat deposits
Limited trading options
The seventh platform on the list is 1inch, which offers effortless crypto trading. This is also the best DEX aggregator on the list. The platform scans multiple DEXs before each transaction, allowing users to use the lowest prices when buying tokens. Its liquidity pool allows users to stake tokens and earn rewards in 1INCH token. By holding onto these native tokens, users also gain voting rights.
More than 400 tokens on offer
Zero transaction fees
1INCH holders can participate in governance
Excellent exchange rates
Other DEXs might charge transaction fees
May be difficult for new traders to use
Next, we have another Ethereum-based DEX called Balancer. This is a platform that executes quick trades by using smart contracts and liquidity pools. It's an AMM and provides users with several liquidity pools. Users can even build their own pools and select one of three types. These include smart pools, private pools, and shared pools.
Gas-free payments despite being on Ethereum
Multiple pool types to choose from when creating your own pool
Quick and easy to use
It lets you generate passive earnings
Transaction fees can vary depending on pool owners, going from 0.0001% to 10%
Next up is Bancor — another credible DEX. Bancor was among the first AMMs to emerge on Ethereum back in 2017. The platform finalizes trades immediately with automatic liquidity. This feature makes Bancor one of the best decentralized exchanges for many traders. Apart from that, the platform's native token, BNT, facilitates fast, effortless payments. The exchange prevents impermanent loss through staking, which is possible via multiple pools. Both staking rewards and BNT contributions return excellent rewards. However, the best rewards come to those who simultaneously stake BNT and other cryptos.
It's a trustworthy and established platform
Protects users from impermanent loss
Exchange fees vary but remain low
No fiat support
Users must keep their assets in Bancor wallet
Slingshot is a popular Ethereum-based swapping protocol that features 0% fees. Founded in 2020, the platform can search for, send, receive, or swap crypto. The platform is available on both mobile and desktop. It features multi-chain and bridging support for several networks. Those include Canto, Polygon, Arbitrum, Binance BNB Chain, Arbitrum Nova, and Optimism.
Advanced trading tools
It lets you compare prices across multiple exchanges
Stop loss and limit orders are available
You must meet a minimum deposit requirement to participate
The eleventh DEX on the list is CowSwap, a DEX that facilitates the trade of Ethereum-based tokens. It does this by matching supply and demand. It also prevents slippage and fees. However, orders that fail to find a Peer-to-Peer match are sent to the underlying AMM. CowSwap, therefore, allows users to experience both approaches. Users get to execute trades with the best price on-chain across all aggregators and exchanges.
Fully permissionless Meta DEX aggregator
High security and privacy to protect trades
Numerous token pairs
Gas-less trading for off-chain order submissions
Exploited in a hacking attack
Still relatively new
Next up, we have IDEX, which also runs on Ethereum's network. This is the perfect platform for active traders with high trading volume, as they can complete multiple trades simultaneously. Cancellations are also possible with no gas fees. Also, the platform features both market orders and limit orders. Security is also high due to advanced protection mechanisms. It's also worth noting that IDEX uses CEXs and DEXs to support trades and improve security.
It supports around 26 tokens
Staking is available
Gas-free cancellations of trades
Minimal risk of security breaches
Transaction fees are only 0.1%
No fiat support
Users must confirm trades with private keys
Next on the list is DEX.AG, which is an aggregator that gets liquidity from other DEXs. Some of them are even on this list. Combing these platforms before executing trades allows users to get some of the best prices. Not only that, but users can save time and energy.
Saves time and energy
Offers the best prices
You might have to pay fees from other DEXs
In the next spot we have AirSwap, which operates on Ethereum, so users must pay ETH gas fees. Other than that, there are no fees charged by the platform. The exchange has its native token, AST, which can be swapped with any ERC-20 token. Deposits and withdrawals are instant, so the user experience is excellent.
Minimal risk of security breaches
Multiple tokens supported
Peer-to-Peer trading is only completed when a suitable trader has been located
SushiSwap is one of the best-known DEXs in the crypto industry. It evolved from Uniswap and deserves to be on the list of the best decentralized exchanges for several reasons. Its native token, SUSHI, allows users to generate passive earnings through staking. Various governance benefits are gained, and SushiSwap also has a unique DEX architecture that reduces the centralization of the market.
Low transaction fees
Works with most ERC-20 tokens
Highly intuitive interface
Complicated rewards structure
Limited in cutting-edge technology
PancakeSwap is next on our list. This is the largest DEX on the Binance Smart Chain, known for its very low-cost liquidity pools. The platform also features minimal risk of slippage. This non-custodial DEX offers automatic trading thanks to its liquidity pools. The pools run via smart contracts on the BSC. Meanwhile, the exchange's native token, CAKE, is used in staking, yield farming, or governance.
More than 50 supported DeFi tokens
Low transaction fees
Slippage risks are significantly reduced
Possibility of impermanent loss
17 WX. Network
Next on the list is WX.Network. This DEX, formerly known as Waves, uses digital assets such as BTC and LTC. The platform also offers an initial coin offering feature, which enables crowdfunding. Its interface has been designed to be easy to use and has a unique design. It can also reduce slippage by combining centralized and decentralized functions.
Low risk of slippage
It uses its own blockchain
Extremely low trading fees (0.03%)
Multiple supported assets
No fiat support
It is not regulated
Next up is Xfai, a unique DEX that adopts an automated market maker model to create entangled liquidity pools. The DEX uses a system of on-chain constant function market maker (CFMM) smart contracts, rather than the token-pair-based constant product market maker approach. This aims to address the challenges of liquidity fragmentation (where liquidity is fragmented across different platforms, making price discovery difficult) and high slippage. Hosted on both the Ethereum and Linea chain, Xfai also offers 'Infinity Staking' to users — a unique form of liquidity provisioning.
Custom built to avoid liquidity fragmentation and minimize slippage
Allows users to trade any digital asset
Simple dashboard for managing all assets in one place
Risk of impermanent loss from AMMs
Relatively high swap fee of 0.4%
Finally, ParaSwap is a popular multi-chain DeFi aggregator that aims to give traders and DApps access to the best prices, high liquidity, and fast transactions. ParaSwap achieves this by curating the liquidity of DEXs and lending protocols into a single and secure interface and API for intuitive usability. The platform combines a yield optimizer, independent smart contract audits, and advanced charts with its API functionality to help users find the most favorable prices with little effort.
Aggregator functionality presents users with the best prices
Simple access to fragmented liquidity pools
Unable to purchase cryptocurrencies directly
Cannot use fiat currency to make trades
Should you trade cryptocurrency on DEXs?
DEXs have grown to be a massive part of the crypto trading scene. Thanks to their non-custodial nature, your funds are never put in danger during trading. The trades are instant, and everything is done through smart contracts. With that being said, even the best decentralized exchanges have their downsides. This is why it's essential to research any platform before you begin to use it.
Which is the best decentralized exchange?
Each DEX has its pros and cons, so none can be described as the best. It all depends on what qualities are more important to each trader.
What is the biggest DEX?
The largest DEX in the crypto industry is Ethereum-based Uniswap. Uniswap has the largest trading volume, the metric we used to decide the largest DEX.
Is Binance a decentralized exchange?
Binance is not a decentralized exchange. Quite the opposite, it is a fully-centralized crypto exchange, with custody and other services offered by similar platforms.
Is Coinbase a decentralized exchange?
No, Coinbase is not a DEX either. Like Binance, Coinbase is also a regulated, centralized platform. It is the largest regulated exchange in the US.
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