A decentralized exchange (DEX) allows users to trade crypto without using an intermediary. Additionally, most DEXs support DeFi products such as staking, loans, and yield farming.
According to CoinMarketCap, the total trading volume on Decentralized Exchanges (DEXs) is $3,504,134,760.79 as of October 2, 2023. That is a significant volume growth, considering that the first DEX, NXT Asset Exchange, was launched in 2014. This guide will teach you about the best decentralized cryptocurrency exchange based on factors like low fees, supported tokens, DeFi tools, and more.
5 Best Decentralized Cryptocurrency Exchange
Uniswap – The Best for ERC20 Tokens
Uniswap v3 (ETH: $UNI) is the best decentralized cryptocurrency exchange on the Ethereum Network. The DEX 24-hour trading volume is $515,397,240.68 as of October 2, 2023. Since its launch in November 2018, it has seen over $1.4 trillion worth of crypto exchanged.
The Uniswap DEX supports ERC 20 tokens exclusively. Today, most ERC20 tokens launch on the DEX. Since its founding, it has integrated other blockchains, including Polygon, Binance smart Chain, Arbitrum, Celo, and Optimism. Consequently, it is one of the best decentralized exchanges for cross-chain swaps.
A great feature of Uniswap is that it runs on a no-KYC policy. Users simply connect their wallets and begin trading tokens. Smart contracts execute all transactions, and users always retain ownership of their assets. Uniswap supports a yield farming feature, where investors can earn a portion of the trading fees by providing liquidity. Uniswap currently has a total value locked of $2.186 billion. The exchange charges a 0.3% fee on all transactions.
Pancakeswap – The Leading DEX for BSC Tokens
PancakeSwap v2 (BNB: $CAKE) is the leading DEX for trading Binance Smart Chain (BSC) tokens. Today, PancakeSwap is a popular place to launch newly created BSC tokens. The DEX currently has a 24-hour spot trading volume of $56,610,291.65. Just like Uniswap, the platform operates on a no-LYC policy. The only requirement to use the DEX is to connect your wallet and pick the token you want to trade.
Besides token trading, the DEX also supports staking and yield farming. Users can stake the native token CAKE and earn APYs of up to 3.2%. One of the best liquidity pools for yield farming is CAKE/BNB, which can earn users an APR of up to 46.51%. The platform has $1.395 billion in total value locked. Fees on PancakeSwap are incredibly low at just 0.25% per trade.
SushiSwap- Great for Yield Farming
SushiSwap (ETH: $SUSHI) is a popular DEX that launched in 2020. The exchange was built on Ethereum, supporting hundreds of ERC20 tokens. As of October 2, 2023, the 24-hour spot trading volume was $5,930,576.47. The DEX offers a cross-chain feature that allows users to access other blockchain networks. Currently, it supports Polygon, Fantom, BSC, Optimism, and Arbitrum.
Besides token trading, the sushiSwap DEX is popular for its DeFi products. They include Bento Box, a token vault that generates yield for deposits, and Kashi, a lending and margin-trading platform that allows anyone to create customized, gas-efficient markets. Other products include MasterChef V2 and Miso, which support trading via fixed prices or Dutch auctions. Compared to other leading DEXs, the TVL on SushiSwap is quite low at just $275.28 million. Its trading fees are similar to those on Uniswap at 0.3%.
Curve Finance – Great for Stablecoin Trading
Curve (ETH: $CRV) is one of the best decentralized exchanges for traders who care about volatility. The unique AMM algorithm of Curve ensures that users can trade with high liquidity and minimal slippage. As of October 2, 2023, the 24-hour spot trading volume is $46,805,760.54. Like Uniswap, Curve was built on the Ethereum Network. The DEX was originally created to allow users to swap stablecoins of similar value. Its unique design helps to protect traders from impermanent loss.
One of the ways to earn through Curve Finance is by being a liquidity provider (LP). An LP on Curve receives 50% of all trading fees, which causes the base vAPY to rise as pool volume rises. Swap fees on Curve range from 0.04% to 0.4% when the price deviates from the internal Oracle price. The TVL on Curve Finance currently stands at $2.159 billion.
dYdX – Great for Perpetual Trading Options
dYdX (ETH: $DYDX) is currently the largest DEX by 24-hour spot trading volume, which stands at $1,178,897,079. The trading volume accounts for around 33.9% of all DEX trading volume in the past 24 hours.
Unlike other DEXs, dYdX operates as an order book DEX. Consequently, it gives traders a more traditional crypto trading experience. However, it does have some unique features. One is leveraged trading of up to 5x for users that go long or short on ETH. dYdX also supports a crypto lending feature via cross-margin lending and borrowing. The lending feature allows users to earn a passive income if they leave assets on the platform. Assets actively used to trade can also generate interest.
dYdX is the leading DEX for layer-2 perpetual trading options and NFT collections for community building. It also offers a Ropsten Ethereum testnet for projects looking for a risk-free testing protocol.
The exchange has pursued a policy of incremental decentralization, with most of its features now built on trustless protocols that are publicly extensible without requiring permission. Trading fees on the DEX are tiered, according to volume. They range from 0.050% to 0%. dYdX currently has a TVL of $351.56 million.
The DEX Market Share Is Growing
Since the first DEX launched, its market share has continued to rise from almost nothing to its current level. A major reason traders flock to them is their non-custodial nature, which reduces the risk of funds being frozen by centralized authorities. However, DEXs still have a few kinks that are being worked on. Conducting your own research to find a DEX that best suits your needs is important.
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