Review of decentralized exchanges (DEX).

With the current development and position of the cryptocurrency industry, decentralized exchanges occupy an essential place. With their help, millions of users can transfer digital coins directly to the recipient. Platforms like Binance and Coinbase are the most popular crypto exchanges, but they are centralized because they are managed by a company that profit from it.

Most users, especially new ones, resort to using popular centralized exchanges. However, if you need to transfer funds directly to the recipient without intermediaries, DEX will come to the rescue. Decentralized exchanges (DEXs) are the core component of the decentralized finance (DeFi) ecosystem. Unlike centralized platforms, in DEX, transactions are carried out directly on the blockchain.

Centralized exchanges are the most convenient for trading, especially those new to digital assets and technology. Platforms like Binance, Coinbase, Gemini or Kraken are popular. However, centralized exchanges have many disadvantages, due to which they significantly lose to DEX. Such drawbacks include the potential loss of access to their assets if, for example, the platform was hacked by hackers. Also, many centralized exchanges require users to pass KYC authentication. In the event of a hack, there would be a risk that sensitive user data could theoretically fall into the wrong hands.

The main advantage of decentralized exchanges is the process of making a transaction. Funds are always under the user’s control, and if necessary, they go directly to the recipient, without intermediaries. The downside of DEX is the potentially high fees and the longer time it takes to complete a transaction. It is due to the peculiarities of working with blockchain technologies. Let’s look at the best DEXs that have become prominent in 2021 and offer the crypto space in 2022.

Uniswap.

The Uniswap platform is an open-source cryptocurrency exchange built on the Ethereum blockchain. It is popular with traders because it makes it easier to trade with ERC-20 tokens than other DEX exchanges. Moreover, among all the offerings for DeFi, Uniswap can solve the problem of lack of liquidity.

Today, the platform supports over 5,500 tokens. Users have access to them both through regular exchange and through a professional one. Uniswap charges a 0.3% fee for token swaps. There is currently no commission for the payment protocol, but it should be 0.05% in the future.

At the time of writing, the version of the Uniswap platform (v2) has a 24-hour trading volume of $574,022,207 and holds 8.1% of the market share. The Uniswap version (v3) has a daily trading volume of $722,734,645 and a 10.2% market share.

Sushi Swap.

Another DeFi platform is built on the Ethereum blockchain. SushiSwap is a community-driven fork of Uniswap that has evolved into a DeFi hub offering token swaps, farming, and crypto lending. Exchange users who have a SUSHI platform token can influence the operation of the network by voting on various proposals.

SushiSwap supports around 1,400 different tokens, and the platform fees are the same as Uniswap. The daily trading volume on the exchange is $ 210,311,869, and the market share is 3.0%.

PancakeSwap.

The PancakeSwap DEX platform is a clone of the Uniswap and SushiSwap exchanges on the Ethereum blockchain but operates on the Binance Smart Chain. It allows users to trade BEP-20 tokens. In addition, owners of the CAKE exchange management token can, similarly to SushiSwap, influence the platform’s operation by voting.

At the moment, the platform supports about 290 tokens. The commission for traders is 0.2% per transaction, which is in the lower part of the range. The choice of wallet that needs to be linked to work with PancakeSwap is enormous. Trust Wallet, MathWallet, TokenPocket, WalletConnect, SafePal Wallet, Binance Chain Wallet and MetaMask. The daily trading volume is $472,620,728, and the market share is 6.7%.

1inch.

The peculiarity of the 1inch exchange is that it is a DEX exchange aggregator and not a dedicated DEX itself. Therefore, the platform looks for other businesses to offer its users the lowest commissions and prices when working. Currently, it supports search on 21 exchanges; the number of tokens that 1inch supports is several thousand.

The key benefit of using the 1inch DEX exchange aggregator is that it does not charge any exchange fees, deposit or withdrawal fees. To get started with the platform, you need to select the network used: Ethereum, Binance Smart Chain or Polygon. 1inch has a 24-hour trading volume of $363,639,824 and a market share of 5.1% at the time of writing.

Compound.

The Compound is a dedicated DEX exchange. Its users can tokenize assets locked on the platform. Owners of the token exchange token can also receive profit in the form of interest on their purchases. They can also use them in other applications.
The disadvantage of the platform is the complexity of use. Therefore, before starting to work with Compound, traders without extensive experience are advised to familiarize themselves with the venue and the features of its functioning.

Curve Finance.

The Curve Finance platform was created for the exchange of stablecoins, as well as their tokenized versions. In addition, the platform acts as a decentralized liquidity aggregator where any user can add assets to various liquidity pools while earning a fee. There are currently 17 Curve pools available to users.

The commission for all pools is 0.04%, 50% for liquidity providers, and 50% for DAO members holding veCRV tokens. The platform will also be challenging to use for beginners. The 24-hour trading volume is now around $276,816,654, and the market share is 3.9%.

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