Looking for the top decentralized exchanges (DEXs) for trading?
Do you seek to know more about decentralized exchanges?
I’ve got you covered.
In this article, I will tell you all you need to know about decentralized platforms, including their advantages and disadvantages, with the top five decentralized platforms.
So, let’s get into it.
Decentralized exchanges are fully decentralized cryptocurrency exchanges, where transactions occur peer-to-peer without any intermediary broker or middleman. They function by the use of an Automated Market Maker (AMM), which is a smart contract that processes orders by using incoming liquidity provided by traders and existing on-chain liquidity reserves.
In recent times, the cryptocurrency market has witnessed an upsurge in the use of decentralized exchanges. The reasons are not far-fetched. Decentralization represents the core value of cryptocurrencies and blockchain technology, as they give power to the investor and treat him as the sole owner of his assets.
Other advantages and disadvantages of decentralized exchanges are as follows:
Pros
● No centralized equity.
● Non-custodial
● Non-manipulative.
● Secure
● Token accessibility
Cons
● Liquidity limitations
● Less efficient order execution
● Higher fees
Here are the top 5 decentralized exchanges:
1.PancakeSwap: This decentralized exchange runs on Binance Smart Chain and allows you to carry out different functions such as becoming a liquidity provider, staking your LP tokens to farm new tokens, and swapping your tokens.
Pancake swap also has a native token called “CAKE.” The token can be used in different ways and its value increased recently.
2. SushiSwap: This decentralized crypto exchange is built on the Ethereum blockchain. It utilized AMM to create and manage liquidity pools of tokens that can be tapped into by users to swap crypto assets. This AMM model of SushiSwap enables users to trade cryptos and earn yields in the form of SUSHI tokens and trading fees without depending on a centralized platform operator.
3. Bancor:
Bancor is a renowned decentralized exchange that pioneered the Defi market since its early days. It is operated by the Swiss-based Bancor Foundation, the ‘Bancor Network’, which is a successful token swapping and yield farming platform powered by the native BNT token. For Bancor, its AMM does not implement the standard 1:1 basis for providing liquidity. Also, you don’t need to provide equal portions of two tokens in a liquidity pool. Bancor also has its liquidity protection feature, quite like coverage insurance. Traders can protect their Defi adventures by staking certain assets.
4. Uniswap:
This is one of the most renowned DEX in the Ethereum space. With it, you can convert any ERC20 token to another ERC20 token. Because of its popularity, it’s become the choice place for most new Ethereum based project launch pads. Uniswap also helps you to become a liquidity provider, so you can earn passive income from your crypto holdings.
5. 1Inch Exchange:
1inch exchange is a DEX aggregator instead of a standard DEX. It functions by collecting liquidity across a wide range of liquidity pools, trading platforms, and decentralized exchanges to find the best rate and most efficient trade possible. It also reduces fees and slippage by using capital from the whole Defi market. It also has a swap feature, limit order feature, and yield farming feature. You don’t need to input your information before using 1inch Exchange
Conclusion
Decentralized exchanges are here to stay. With their myriads of benefits, there is no doubt that they will continue to rake in more profits. If you want to jump on this bandwagon, you can select the above-listed decentralized exchanges. You’d be glad you did.
