Cryptocurrency trading is one of the essential niches in the industry. Each crypto holder has interacted with crypto exchanges at least once. If we look deeper into the current trading situation, we may discover several vital issues that bother traders – availability, transparency, and security. Centralized exchanges (CEXs) provide decent platforms in terms of UX/UI, enhanced trading features, and so on.
Still, they are intermediaries between users and blockchain. Most of the regular exchanges are custodial, which means they store users’ funds on their servers. It is not as safe as it seems, yet centralized crypto platforms try to provide top-notch security solutions. A perfect alternative to cryptocurrency trading platforms are decentralized crypto exchanges (DEXs) that are currently seizing the moment of popularity.
Changelly continues to provide educational articles about the crypto and blockchain industries. We are going to explain what DEX is and what should be taken into consideration when trading crypto via DEX. We’ve also collected the top ten DEXs for advanced and robust trading. Let’s cover them all.
What Is DEX?
As we mentioned above, DEX stands for a decentralized crypto exchange. DEX is a platform that allows two independent parties to make cryptocurrency transactions without third-party interference or, in other words, in a peer-to-peer (P2P) way. For flawless interaction with a DEX, you need to obtain a digital wallet.
The lack of intermediary is increasing the security of a transaction process as well as the user’s anonymity. However, some decentralized exchanges require KYC and collect personal information (e.g., IDEX, BinanceDEX, etc.)
As there is no central authority in DEXs, it is more difficult to manipulate the market.
The most popular DEXs are built upon the Ethereum blockchain. As time goes by, other distributed ledgers like TRON, BinanceChain, EOS, and many others, manage to provide an appropriate environment for decentralized crypto swaps.
Centralized Exchange vs. Decentralized Exchange
To protect users from any kind of fraud, centralized exchanges offer 2fa, cold storage, white lists, and so on. Still, there is always a possibility of hacks;
Following the crypto motto code is law, DEXs do not have access to users’ funds. The transactions are made directly between two parties and reflected in a blockchain;
Such veterans of the cryptocurrency industry as Bitfinex, HitBTC, and Bittrex provide a wide variety of trading instruments and tools like Margin trading, OTC, Dark pools, etc.
DEXs are relatively new to the market. The functionality of such exchanges is not as enhanced as on centralized ones. DEXs usually provide a limited number of trading pairs and most of the time assets traded on a DEX are built on the same blockchain;
Giant CEXs provide a considerable amount of liquidity to digital assets;
Attracting liquidity is a big pain of decentralized exchanges. As most DEXs are sharpened to crypto-assets of a particular blockchain, the choice of trading assets is limited;
Centralized exchanges charge higher fees;
On the contrary, DEXs offer lower commission fees as there is no need to pay salaries to a large number of workers.
The New York-based team behind the Uniswap DEX introduced a liquidity protocol of the same name built on the Ethereum blockchain. Uniswap is a liquidity pool and decentralized exchange for ERC-20 tokens, which provides efficient and robust trading without third-party interference.
Uniswap has recently launched Uniswap V2 with significant security and usability improvements. From now on, the direct token-to-token swaps are possible (without an intermediate ETH step). As there is no need to pay gas anymore, the transaction fees will be reduced. The interface of Uniswap V2 remains the same as the initial V1 platform’s design.
According to Dune Analytics, Uniswap takes 49,9% of DEXs’ market share by volume for the last 24h and the last week.
#2. Kyber Network
A famous ‘fully on-chain liquidity protocol’, Kyber Network, allows for instant ERC-20 tokens swaps. In simple terms, Kyber Network aggregates liquidity from multiple platforms and provides it to a single network so that users can seamlessly transfer their tokens in just one transaction.
Kyber Network is an important part of the Ethereum and crypto communities. It aims at showing the benefits of decentralization by providing transparency and trust between traders.
Kyber is not a regular decentralized exchange, but a protocol that can be implemented to any blockchain that supports a smart contract feature. With that in mind, various decentralized applications (dApps), DEXs (Uniswap, Oasis), and digital wallets (Coinbase Wallet, Trust Wallet) use the Kyber protocol for better performance.
How to buy a Tron coin in a simple yet decentralized manner? Just visit TronTrade – a decentralized exchange for TRX and Tron-based tokens. Intuitive UX and smart design will provide every user with an efficient trading experience.
TronTrade is the first decentralized exchange that supports TRC-10 tokens. The platform is community-focused and provides 24/7 customer support. There is no need to create an account within the exchange. All you need is a decent TRON wallet that will help you to interact with the DEX.
IDEX is the first and well-known Ethereum decentralized exchange that provides a wide range of trading pairs. Besides various ERC-20, there are USDT, USDC, TUSD, and DAI markets. The platform’s design is quite native, so it is easy to get used to it. IDEX charges 0.2% for market takers and 0.1% for market makers. Take into consideration that users have to pay gas fees in order to place their transactions on the blockchain.
If you have any questions regarding withdrawals, deposits, staking, and others, IDEX has a decent FAQ and Guidelines sections. However, IDEX obliges users to pass strict KYC (Know-Your-Customer) procedure, which raises concerns around exchange’s decentralization. Still, IDEX is more secure than most of the centralized trading platforms.
IDEX is going to introduce IDEX 2.0 which will offer greater scalability, better security features, and a lack of gas fees. The platform is currently available in demo mode.
Please pay close attention to the announcement! IDEX has recently posted a scam alert tweet about a fraudulent mobile application on Google Play.
A self-proclaimed “the most powerful open trading platform for crypto assets,” dYdX is seriously going to conquer the market of decentralized exchanges. dYdX is another Ethereum based DEX that provides such a rare for decentralized platforms options as margin trading and derivatives. dYdX enables margin trading with an up to 4x leverage.
In April 2020, dYdX introduced Perpetual Contract Markets that would allow you to trade any of non-Ethereum based assets. This is a truly impressive solution as traders can trade a BTC-USDC pair with up to 10x leverage now. dYdX also offers a lending option in order to attract more liquidity to the exchange. DYdX’s design is smart and neat. Thereby, traders can enjoy flawless trading experience.
#6. Bancor Network
When you examine the Bancor DEX, the first thing that comes to mind is simplicity. UX/UI are intuitive, while the team behind the project offers instant support. Just like many other decentralized exchanges, Bancor is built upon the Ethereum blockchain.
What differs it from the rest of the DEXs is an opportunity to exchange digital assets of different distributed ledgers. Due to a genuine Bancor protocol, users can seamlessly exchange, for example, ETH to EOS and vice versa.
Bisq is one of the best decentralized bitcoin exchanges and also a trading protocol, desktop application, and free software. The platform allows you to sell and buy BTC in exchange for national currency or other digital assets. Bisq supports many payment options, so it won’t be a problem to purchase crypto in a truly decentralized way.
Being built upon the Tor network, Bisq has the same censorship resistance as the main chain. Transaction details are available only for counterparts. It seems that the main disadvantage of the Bisq DEX is the complexity of trading processes. Therefore, the exchange perfectly works for professional traders rather than crypto novices. Note also that transactions may take a long processing time, so if you want instant crypto swaps, you should probably keep on searching for it.
Oasis DEX runs on the Ethereum blockchain allowing to exchange any of ERC-20 tokens.
To work on this exchange, you need to obtain an Ethereum wallet like Mist, MetaMask, etc. The DEX will detect the network and connect to it automatically while the system will check the synchronization.
You can buy or sell the following tokens on the OasisDEX exchange: ETH, MKR, DGD, REP, ICN, 1ST, SNGLS, VSL, PLU, and DAI. Just like other DEXs, Oasis doesn’t support fiat.
The main advantage of this token exchange platform is its high security. Among other benefits of OasisDEX are the ability to expand trading pairs to all tokens built on the ERC20 protocol, lack of commission fees for deposit and withdrawal, and quick transactions.
NewDEX is the best decentralized exchange built on the EOS blockchain. Launched in 2018, NewDEX has managed to attract EOS side chains (sister chains), thereby building a large network of interchangeable crypto assets.
In 2019, NewDEX announced the launch of TRON based decentralized exchange. The platform has adopted the operating mechanism ‘matching off-chain and settlement on-chain.’ Pursuing the goal of enhanced trading opportunities, NewDEX enabled the OTC option in 2019.
This decentralized exchange has native UX and UI which provide a seamless trading experience to new users. NewDEX introduced a USDT cross-chain conversion so it is the perfect alternative to regular US dollars.
Binance exchange burst into the crypto industry in 2019. Since then, it managed to become the leading cryptocurrency exchange in the world. It seems that the platform strives to conquer the crypto market and succeed. In 2019, Binance launched its own decentralized exchange based on the BinanceChain blockchain. There are currently 25 trading pairs available.
Some community members claim that BinanceDEX is not as decentralized as it supposes to be. However, the exchange is quite popular and keeps on upgrading and enhancing trading features.
“…Binance DEX is preferred by those who would like to have full control of their private keys and funds; users at DEX are responsible for their funds security, and have greater freedom of issuing assets, developing tools, etc.,” saidChangpeng Zhao, CEO of Binance, in the interview to Eric Benz.
The crypto industry, as well as other digital entities, attracts bad actors with fraudulent cyber techniques. We kindly remind you to do your own research before putting your funds into any cryptocurrency project. There are several points that should be examined.
The Reputation of an Exchange
Read users’ reviews on the Internet to decide whether a DEX platform is worth your trust. Most often, users’ opinions are the most reliable criterion of search. However, let’s face it: users usually write negative feedback if the service failed them. In these terms, one should try to evaluate a platform with an unbiased yet attentive look.
This parameter is very important. For example, not all cryptocurrency exchanges work with Visa and Mastercard payment cards. In addition, when using a bank card, you have to go through multi-level verification. Therefore, when choosing a decentralized cryptocurrency exchange, always pay attention to payment in order to avoid further problems.
Most exchanges, including decentralized ones, charge fees. It is extremely important to know about them before depositing crypto assets and making transactions. Ethereum-based DEXs charge gas fees so one should carefully explore all the conditions before interacting with an exchange.
Each exchange has its own exchange rate. Since these exchange rates are set for themselves, sometimes they can be very different. Naturally, it makes sense to compare them and choose the most profitable for yourself.
Restrictions on the Geographic Location
Decentralized exchanges strive to be accessible to any human being in the world regardless of his/her nationality and residence. However, few DEXs underline that they cannot be accessed by users from particular countries.
Best decentralized exchanges aim to enhance the DeFi sector and provide users with transparent and secure trading. Just like DEXs, Changelly is a non-custodial crypto exchange that allows you to instantly buy, sell, and exchange over 160 cryptocurrencies. Buy crypto at your choice with a credit card (Visa, Mastercard), bank transfer, or Apple Pay.
Changelly is a non-custodial instant cryptocurrency exchange service that acts as an intermediary between crypto exchanges and users, giving the latter an opportunity to exchange over 160 cryptocurrencies at the best market rates. Changelly offers its API and a customizable payment widget to any crypto service that wishes to broaden its audience and implement new exchange options.