For People interested in cryptocurrencies, there’s always one question at the top of everyone’s mind: what are the best Centralized and Decentralized crypto exchanges? The fact is that there is no universal solution because it is highly dependent on your requirement, and initial funds for investment.
This guide will solely focus on the best Decentralized exchanges or DEXs, so if you are interested in Centralized exchanges like Binance, coinbase, FTX, etc. you might need to check our Reviews guide.
Let’s get started…
What is Decentralized Crypto Exchange?
A Decentralized exchange (or DEX) is a peer-to-peer trading exchange where cryptocurrency traders deal directly with one another.
DEXs enable one of crypto’s most important features: facilitating money transfers that aren’t mediated by banks, brokers, or other third parties.
Pancakeswap and uniswap are some best-decentralized crypto exchanges.
List of 5 Best Decentralized Crypto Exchanges
| Ranking | Exchanges | Average 24H Volume |
|---|---|---|
| 1 | dYdX | $5.2B |
| 2 | Uniswap | $1.2B |
| 3 | Pancakeswap | $600M |
| 4 | Sushiswap | $91M |
| 5 | Trader JOE | $88M |
1. dYdX: Top Rated Decentralized Exchange
dYdX is a prominent non-custodial decentralized exchange to create open, safe, and strong financial solutions.
dYdX is based on Ethereum and runs on certified smart contracts, eliminating the need for a centralized exchange for trading. The exchange combines the speed and usefulness of a centralized exchange with the security and scalability of a decentralized one.
dYdX is a decentralized crypto exchange that offers a wide range of trading pairs, 24/7 high liquidity, and an easy-to-use interface.
dYdX claims to be the first exchange of its kind that uses blockchain technology for trading by using smart contracts. It is the world’s first decentralized cryptocurrency exchange where users can trade cryptocurrencies in a peer-to-peer fashion.
The platform has been in development since 2017 but was officially launched earlier this year.
Pros and Cons:
The dYdX platform provides users with a number of features including:
- Decentralized trading volumes (no third-party involvement)
- The smart contract-based order book (no third-party involvement)
- Multi-language support (English, Chinese and Korean)
- 24/7 availability (always available)
dYdX Fees Structure:
dYdX calculates its transaction fees using a maker-taker fee mechanism. Maker and Taker orders are the two types of orders on dYdX.
- Maker orders are orders that do not fill right away and sit on the order book, adding depth and liquidity to the market.
- Taker orders, on the other hand, cross current Maker orders right away. They deplete the order book’s liquidity.
| Level | From (30D Volume) | To (30D Volume) | Maker | Taker |
| 1 | $0 | $1,000,000 | 0.02% | 0.05% |
| 2 | $1,000,000 | $5,000,000 | 0.015% | 0.04% |
| 3 | $5,000,000 | $10,000,000 | 0.01% | 0.035% |
| 4 | $10,000,000 | $50,000,000 | 0.005% | 0.03% |
| 5 | $50,000,000 | $200,000,000 | 0% | 0.025% |
| VIP | $200M+ | – | 0% | 0.02% |
dYdX Token:
2. Uniswap: The most Secure decentralized crypto Exchange
The Uniswap network is a peer-to-peer-1 mechanism for swapping Ethereum blockchain coins.
The system is built as a series of non-upgradable smart contracts that prioritize censorship resistance, confidentiality, and self-custody while operating without the need for any trusted middlemen who may deliberately limit access.
The Uniswap protocol is now available in three versions. V1 and V2 are GPL-licensed open-source projects. V3 is an open-source project with several enhancements.
The Uniswap exchange was built on the EOS blockchain and it allows users to trade using five different cryptocurrencies: Bitcoin, Ethereum, Litecoin, Ripple, and Uniswap Tokens (UIS).
Uniswap has been in operation since the middle of September 2018 and it currently supports more than 900 coins.
Uniswap Fees:
Liquidity providers (LPs) receive fees according to the volume of liquidity that had been offered during a trade completed on Uniswap.
This cost is typically 0.35 percent, but it may be as low as 0.055 percent for stablecoins and as high as 2 percent.
However, Ethereum token gas fess may high depending on network mechanism.
Pros
- Ethereum blockchain or ERC-20 token available for swap
- Flexible Interest rates for crypto staking
- Support all Top crypto wallets
- Easy-to-use Interface
- High Security
Cons
- High gas fees for the Ethereum network
- Cannot buy using Fiat Money
- Price difference compared to Centralized Exchanges
UNI Token
3. Pancakeswap: All-in-one Decentralised exchange
PancakeSwap is a Binance Smart Chain decentralized exchange for swapping BEP20 tokens. Users of PancakeSwap, exchange against a liquidity pool using an automated market maker (AMM) approach.
Users’ money is put into these pools. They put them into the pool in exchange for liquidity provider (or LP) tokens. They can regain their share, as well as a part of the transaction cost, with those tokens.
Pancakeswap offers several features that make it stand out from other decentralized exchanges:
- Security – The platform uses the NEM blockchain to ensure that users are protected from hacks and scams.
- Speed – Transactions are processed in under 1 second, making it one of the fastest decentralized exchanges available today.
- User Experience – Users can access their accounts using their mobile phones as well as desktops/laptops with web browsers installed (it doesn’t require any additional software). This makes it easy for everyone to use Pancakeswap without having to download anything onto their computers
Pancakeswap Fees:
When a trader uses PancakeSwap, they pay a 0.25 percent fee, of which 0.17 percent goes to the Liquidity Pool of the swapping pair.
Pros
- the liquidity pool, swapping, and market order available
- High yield on Staking
- Rewards on CAKE token
- Binance smart chain BEP-20 Token available
- Low transaction fees
Cons
- Impermanent losses
- Defi security issues
CAKE Token
4. Sushiswap: ERC-20 Decentralized exchange
SushiSwap is a decentralized exchange that aims to be the most secure, easy-to-use, and user-friendly platform for tokenizing digital assets.
It is also the first cryptocurrency exchange to offer a peer-to-peer (P2P) trading system based on blockchain technology.
SushiSwap is a fork of Uniswap designed to take control away from venture capitalists and give it back to the community.
SushiSwap achieves this purpose using a set of liquidity pools, analogous to technologies like Uniswap.
Benefits of Using Sushiswap DEX
- SushiSwap has launched with over 200 tokens in its ecosystem, including Bitcoin, Ethereum, and Litecoin.
- The platform is designed to help users trade tokens of all types — from utility tokens to security tokens — on a decentralized blockchain platform.
- The SushiSwap ecosystem is built on top of the Ethereum protocol and follows the same model as other decentralized exchanges like EtherDelta and IDEX.
- In addition to being a fully featured crypto exchange, SushiSwap allows users to create their own derivatives products such as futures contracts or options contracts.
- This feature makes it possible for traders to create new financial products that can be traded on its platform without relying on central authorities like governments or banks
Sushiswap Fees:
0.3% of taker and maker fees whereas zero withdrawal fees.
SUSHI Token
5. Trader JOE: Best Decentralized Exchange on Avalanche
It is one of the most popular DEX (Decentralised Exchange) platforms among the Avalanche ecosystem coins.
JOE provides yield farming, staking, and lending. Trader Joe’s delivers all of the features of a modern DEX, as well as a user-friendly interface and quick and low-cost transactions.
Users can contribute liquidity by participating in one of the yield farms and earning JOE (JOE), which can then be staked and used to vote on governance initiatives.
Learn more: Avalanche Ecosystem coins
Trader JOE Fees:
A 0.3 percent trading fee is charged when you conduct a token swap on the exchange. 0.25 percent – A trading charge for liquidity providers is paid to liquidity pools. 0.05 percent – Staked using sJOE
JOE Token
Comparison between Best Decentralized Crypto exchanges
| dYdX | Uniswap V3 | Pancakeswap | Sushi | JOE | |
|---|---|---|---|---|---|
| launched | 2019 | 2021 | – | 2020 | 2021 |
| Type | order book | swap | swap | Swap | – |
| volume | $5.5B | $1.2B | $589M | $96m | $84M |
| #Markets | 10 | 645 | 4181 | 466 | 346 |
| %mkt share | 0.0072% | 0.0016% | 0.0008% | 0.0001% | 0.0001% |
Advantages of Decentralized exchanges over Centralized
Decentralized exchanges have many advantages over centralized exchanges. These include:
- Lower fees: Decentralized exchanges do not require any premium to be paid by the user. Decentralized exchanges charge no fees while their centralized counterparts do. This is because they don’t have any middlemen who take a commission from each transaction. Because of this, decentralized exchanges are cheaper than their centralized counterparts that charge small amounts as transaction fees for every trade done on its platform.
- Security: A centralized exchange is vulnerable to hackers and fraud, especially if it’s not operated in a safe environment. If a hacker gains access to the system, he can manipulate the order books and inject false data into the system. That’s why decentralized exchanges are more secure than their centralized counterparts. In fact, they are even more secure because they don’t have any single point of failure like a central server where hackers can attack.
- Ease of use: Decentralized exchanges are much easier to use than their centralized counterparts because they don’t require KYC/AML registration, meaning you can use them without providing any personal information.
Why Decentralized Exchanges are important?
- High security (less prone to hacking)
- No middleman
- complete transparency and privacy
- funds stored in the wallet
- Zero price manipulation
Conclusion
Decentralized cryptocurrency exchanges work without the involvement of a third party, letting users conduct peer-to-peer transactions. These work on automated smart contracts.
Hacking is virtually difficult with a decentralized exchange. This is the greatest option when you’re an investor who is most worried about hacking threats. Because you don’t have to trade assets with a third party in the middle, it’s less vulnerable to hacking.
FAQ
1. Is Binance a decentralized exchange?
No, Binance is a centralized exchange. Uniswap, pancakeswap, dYdX, etc. are some of the best-decentralized exchanges.
2. How does a decentralized exchange work?
Decentralized Exchanges works on Automated marker maker AMM technology which gives access to liquidity pools and Order books. These order books keep track of all active buy and sell orders for all crypto assets. Swapping pools are another method used by DEx like Uniswap, sushiswap, etc.
The post 5 Best Decentralized Crypto Exchanges (DEXs) for 2023 appeared first on Cryptic Era.
