Have you heard of decentralized exchanges? The constant threat of hacking is a significant problem for the bitcoin exchange ecosystem, especially for centralized exchanges. If you use a centralized exchange, you will have to give up control of your assets, leaving you open to theft or hacking.
Because of this, decentralized exchanges, where you can keep your money safe, are becoming more popular and gaining ground in the crypto trading industry. But the question is whether you should use one of the top decentralized crypto exchanges, and if so, which is best. We’ll tell you everything you need to know about DeFi and help you choose the best-decentralized exchange.
Here are the ten best-decentralized exchanges in the world for 2022. We also compare the top DEXs based on their features, prices, and services so that we can give you a complete picture.
What Are Decentralized Cryptocurrency Exchanges Or DEX?
Decentralized exchanges allow direct transactions from your digital wallet without any middleman. Uniswap, dYdX, PancakeSwap, and Kyber are all popular DEX.
Smart contracts, pieces of code based on the blockchain that can run independently, are the core of these decentralized marketplaces. Smart contracts are more private than a central Bitcoin exchange and leave less room for mistakes.
In contrast hand, DEXs are for experienced traders because, even though smart contracts depend on rules, the user is on their own without a trusted third party.
Top 10 Decentralized Crypto Exchanges
According to metrics like user activity, exchange volume, and liquidity, the following are the best-decentralized exchanges in the world:
1. Uniswap
When it came out in November 2018, Uniswap quickly became one of the most popular decentralized exchanges in the world. It was one of the first exchanges to use the automatic market maker (AMM) method instead of an order book. Uniswap is a decentralized exchange for exchanging ERC-20 tokens. It depends on the Ethereum blockchain and uses several smart contracts to do this.
Due to the decentralized nature of the protocol, transactions are directly between users instead of through a third-party trading platform. Also, Uniswap tries to solve the liquidity problem that other exchanges have. The third version of the Uniswap protocol, called Uniswap V3, changes how people get paid and adds new features that give each LP more freedom and control. Uniswap V3 supports over 46.5% of all popular DEX trading, and by May 2022, the protocol had handled $1 trillion worth of trading.
Pros
- Swap ERC-20 coins.
- Simple interface.
- Earn BTC by mining liquid markets.
- There are zero prerequisites for signing up.
- Wallets that can store cryptocurrency
Cons
- Does not accept paper currency
- The possibility of temporary setbacks.
- No KYC
2. dYdX
dYdX made a top non-custodial decentralized platform (DEX) for high-tech crypto goods like crypto perpetual and other derivatives. Because dYdX works with verified payment systems on blockchains like Ethereum, it doesn’t need trusted third parties. In math, the rate of change is written as dYdX, where the word “derivative” comes from. Its native currency, $DYDX, was on the popular DEX in August 2021 to vote on proposals and give traders incentives based on how much they traded.
Pros
- The low prices may be good for the average consumer.
- People use zk-rollups.
- You can use the interest on loans to pay for your investments.
Cons
- Not enough assets to back up swaps
- The interest rate changes from time to time
3. Defi Swap
The Defi Swap DEX eliminates the need for a major third party by making it so buyers and sellers must trade directly. Defi Swap’s automated liquidity pools run on the Binance Smart Chain platform (BSC).
Automated liquidity pools give buyers the coins they want directly, so they don’t have to go through a third party to start a swap or exchange. The platform’s native currency, Defi Coin (DEFC), can be used on Defi Swap to get to these features.
You can use Defi Swap to get access to liquidity pools, protect your assets, and get Defi coins as rewards. DEFC also encourages holding for a long time because you must pay a 10% tax when selling or trading DEFC. But 50% of the tax paid splits proportionally among the people who owned currency at the time. The other 50% goes to pools of money that can get used quickly.
Pros
- Automatic Liquidity Pools
- Easily trade between fifty-plus cryptos.
- DEFC tokens need holding to get passive revenue
- Coming Soon: The Defi Swap App
Cons
- There is currently no Defi Swap mobile app.
4. Curve Finance
Curve Finance, a decentralized liquidity pool, makes it easier to trade stablecoins. Instead of an order book, it uses an AMM mechanism to match liquidity. Since the protocol is decentralized and doesn’t need special permissions, anyone can add liquidity to any liquidity pool. The AMM’s constant product formula ensures that it always works well and has no effect on traders’ profits.
The Curve pools are decentralized token exchanges that use smart contracts that use the StableSwap invariant. Stablecoins (Plain Pools) can be used to swap tokens or wrapped tokens to swap tokens with each other. At the same time, the underlying collateral is loaned out on another protocol. In conclusion, Metapools connect stablecoins from one pool to LP tokens from another.
Pros
- Non-Custodial Platform
- Fully decentralized
- Low fees
- Versatile swaps
Cons
- Complex for new users
- No mobile app
- Depends mostly on the Ethereum blockchain
5. PancakeSwap (V2)
Among popular DEX s, PancakeSwap (V2) is well regarded since it facilitates BNB Chain BEP-20 token trades. It is the largest exchange in the BNB Chain ecosystem and one of the best DEXs by market share. The exchange implements an automated market maker (AMM) methodology, enabling customers to trade against a liquidity pool. When you join an exchange as a liquidity provider, you’ll be rewarded with LP tokens, which can get used to split the fees generated by trades.
Flexible staking enables users to unstake at any moment. In contrast, fixed-term staking increases profit and locks up tokens for up to 52 weeks.
Pros
- Lower trading fees
- Users can earn a variety of NFTs.
- Offers higher yields
Cons
- Not suitable for new users
- Complicated staking process
Also read: Buy Now Pay Later platforms.
6. SushiSwap
SushiSwap is an AMM-based decentralized crypto exchange. By using the capabilities of smart contracts, this automated market maker facilitates the trading of various token pairings. These smart contracts rely on funds from liquidity providers who offer this money and make trading seamless.
Originally a fork of UniSwap, another best DEX, the exchange was an early adopter of this approach. It eventually became one of the largest DeFi exchanges. It is currently supported by the vast majority of layer-one blockchains that are EVM-compatible and a variety of layer-two solutions for Ethereum.
Pros
- A Sushi bar concept makes the platform user-friendly for beginners.
- Users retain legal title to any property they create.
- Users can earn rewards and interest via the usage of the swap features.
Cons
- Difficulty in earning incentives and interest
- Limited to tokens based on Ethereum
7. Perpetual Protocol
The V1 of the Perpetual Protocol, known as the crypto DEX, was introduced on the xDai scaling solution for Ethereum. In contrast, the second version, the Optimism scaling solution for Ethereum, was launched on layer-2 (L2) rising.
In the future, the market will also support more blockchains compatible with the EVM. With a leverage of up to 10X, traders may buy low and sell high on a wide range of assets. Since this exchange is not custodial, traders have control of their assets at all times and transact with their wallets.
Pros
- No implement loss
- The protocol has no hidden costs, and traders may use up to 20x leverage on their funds for long or short trades at any moment.
- High-security levels
Cons
- Flash Crashes
8. Jupiter
Solana’s liquidity aggregator Jupiter connects all crypto DEX and AMM pools, regardless of the supplier, to compile the best token prices across all of them. This smart routing technique also compares prices routed via an intermediate token, which permits the detection of price inefficiencies and volatility in marketplaces. Jupiter automatically divides deals into smaller trade sizes to gain better rates for bigger-size trades. It trades using coins that have thin liquidity across various exchanges.
Pros
- Stable software
- Reliable
- Low cost
Cons
- Not a beginner-friendly UI
9. OpenOcean
OpenOcean is an accumulator for DEXs or decentralized exchanges. It allows for cross-chain swaps and draws liquidity from several DeFi marketplaces. The aggregator offers traders reduced slippage and rapid settlement thanks to its sophisticated routing algorithm, which locates the most favourable prices across many exchanges. With OpenOcean’s no-cost aggregator, customers are responsible for just the gas and exchange costs on the individual blockchains.
Pros
- No-cost DeFi aggregation services
- Supports four different blockchains
- Visually appealing UI
Cons
- The Pro trading interface only provides access to a select few currency pairings.
10. KyberSwap
You can make more money with your token assets by trading them on KyberSwap, where you can choose from over 23,000 tokens and get the best prices across networks. You may instantly trade across several chains without comparing prices on different exchanges. Successfully monetize your liquidity proposition by charging reasonable fees without compromising safety—instant, safe, and anonymous exchange tokens without leaving your wallet.
Pros
- It has some deepest liquidity pools.
- Instant, safe, and anonymous exchange tokens
Cons
- High dependency on the Ethereum blockchain
Conclusion
It would help if you chose a decentralized exchange that meets your needs in terms of how easy it is to use, how much money you can trade each time, the size and liquidity of its market, how anonymous your transactions will be, and how many currencies you can swap them in.
Slippage is the chance that the amount of an asset you get might differ from what you expected because of changes in the number of trades or liquidity. It could happen if the price of the asset changes while your order is being filled, which would happen if you put in a large order.
The best-decentralized exchanges have low fees, a wide range of trading pairs, quick transactions, and an easy-to-use point-and-click interface.
