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Best Decentralized Crypto Exchanges 2023
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Sinead Burgess
With the increased crypto adoption, there is an abundant need for cryptocurrency exchanges for users to purchase or trade crypto. These platforms play a crucial role in the blockchain trading space because they offer users the ability to instantly purchase, sell, or trade cryptocurrencies. There are many types of cryptocurrency exchanges, but one separate branch of them seems to be on the rise in recent years – the so-called decentralized exchanges (DEXs).
In today’s article, we’ll focus on some of the best decentralized exchanges available on the market, but for starters, we’ll explain the difference between these platforms and their centralized counterparts.
Best Decentralized Crypto Exchanges for 2023
Generally, when using a DEX, there aren’t any KYC requirements as anonymity is one of their prerogatives. Other advantages that DEXs have over centralized ones are lower fees, including little to no transaction fees and wider crypto choice for trading. On the vice-versa, DEXs usually don’t support fiat deposits.
There are many different DEXs on the market because of their popularity and user demand. We’ve selected a few that we deem the most noteworthy, and we’ll provide you with a list and the basic know-how to give you a perspective on which exchange is best for you.
We will be excluding network protocols like Curve as it isn’t a fully functional DEX exchange. Instead, it’s a blockchain protocol that enables off-chain instant crypto conversions between users.
COUNTRY: US
Fees: 0.30%
Supported Cryptocurrencies: 185+
UniSwap is an Ethereum-based DEX platform launched in 2018 that allows users to swap ERC-20 tokens with ease.
UniSwap is one of the more popular DEX platforms in the whole DeFi ecosystem. One of their goals is to combat the main issue that’s plaguing DEX platforms – liquidity. UniSwap manages to supply liquidity by allowing users to swap tokens and thus eliminates any reliance on buyers and sellers. The way UniSwap manages this is by allocating tokens in liquidity pools that are bound by a smart contract. UniSwap hosts its own native token called UNI that gives holders the right to participate in the ins and outs of the network functionality.
UniSwap offers over 5,500 different Ethereum-based tokens, including tokens like WBTC, AAVE, DAI, ETH, USDT, EOS, and many more. Tokens like COMP and Binance Coin (BNB) are locked on the exchange, as they don’t follow the predictable ERC-20 rules and are deemed unsafe by the management.
The fees implemented on UniSwap include a 0.3% fixed swapping fee that will be redirected into the liquidity pools reserves and a 0.05% provision fee that will be implemented in the future.
RATING : 5/5
COUNTRY: Japan
Fees: 0.30%
Supported Cryptocurrencies: 520+
Contrary to what the name suggests, there is no sushi swapping on the SushiSwap platform; instead, users can trade or swap cryptocurrencies. SushiSwap is a DEX platform that’s built on the Ethereum blockchain and supports ERC-20 tokens. The platform was created and launched in 2020 by a pseudonyms developer called Chef Nomi.
Aside from swapping tokens, the SushiSwap platform hosts its own crypto token, SUSHI, and token holders can make proposals and votes on the platform’s operations and other user’s idea submissions. The platform was created by using the open-source code from UniSwap and users can earn SUSHI tokens for any locked funds on the platform.
SushiSwap supports more than 1,400 different ERC-20 tokens, and some of those include the most popular DeFi tokens like MATIC, BAL, AAVE, and their rival token UNI. In terms of fees, SushiSwap hosts a regular trading fee that amounts to 0.3% for any trades occurring on the exchange and a gas fee (or Ethereum network fee) for transferring tokens from the platform to a crypto wallet.
RATING : 4.5/5
COUNTRY: Global
Fees: 0.2%
Supported Cryptocurrencies: 290+
For users with a crypto sweet tooth, the PancakeSwap exchange is another great DEX recommendation. PancakeSwap is a DEX exchange that’s also based on the UniSwap source code, but instead of operating on the Ethereum blockchain, the platform works on the Binance Smart Chain (BSC). This feature allows users to trade in BEP-20 tokens and create dApps.
The platform hosts its own native token called the CAKE governance token. As with most DEX platforms, token holders can conduct votes and have a say in the functionality of the platform. The platform was created by an anonymous group of developers, but a great part of the platform operation is left to the users. The platform was not very well known until Ethereum’s price surged last year.
The PancakeSwap exchange supports over 290 different tokens and some of those include ETH, BNB, and sought-after DeFi tokens like PancakeBunny and SAFEMOON. Users can also trade in Binance-pegged tokens like Dogecoin (DOGE).
As for fees, the PancakeSwap platform charges a fixed 0.2% trading fee per trade, which is way cheaper than the fees on most DEX platforms. There are no withdrawal fees, and although you still need to pay a network gas fee, the fee is significantly lower on BSC platforms compared to Ethereum-based ones. This is due to the Binance Smart Chain’s Proof of Staked Authority (PoSA) protocol.
RATING : 4/5
COUNTRY: Global
Fees: VARIES
Supported Cryptocurrencies: 300+
1inch is a DEX exchange that stands out from the crowd of DEX platforms because it plays the role of a DEX platform aggregator. What this means is that 1inch scrapes other platforms to provide users with the best price for cheap crypto trades. This is enabled by rerouting users’ trades through the platforms that offer the cheapest prices and transaction fees for the initial transaction or trade.
The newest version of the platform, 1inch V2, was released in 2020. It supports 21 DEX platforms along with its own AMM, the 1inch liquidity protocol. The platform supports thousands of different tokens and cryptocurrencies as it is eligible to scour through 50 liquidity sources for Ethereum, 20 sources on Binance Chain, and 10 sources for the Polygon network.
There aren’t any fees for using 1inch as a DEX platform aggregator, as users would have to pay the fees charged by the selected DEX platform. 1inch hosts a native token called the Chi Gastoken, which can be used to lower some of the gas fees pricing for the Ethereum network.
RATING : 3.5/5
COUNTRY: Global
Fees: 0.7%
Supported Cryptocurrencies: 11+
Bisq is one of the more popular decentralized exchanges as it supports Bitcoin trading. Bisq users can undertake Bitcoin trading for fiat currencies without having to provide personal information. The platform is open-source, and it’s only available through a desktop platform.
The platform utilizes Tor browser routing, local computing, and third-party wallets to ensure maximum decentralization. Due to these decentralized features, the speed of transactions on Bisq is drastically slower compared to other DEXs because neither buyer nor seller trade is centralized. Users have to manually search for orders in their national currency or other non-crypto payment methods.
Some Bitcoin orders can only be conducted if the user has a Zelle account, while others can be conducted via a bank transfer. Bank transfers might alert local authorities in terms of untaxed withdrawals, but this depends on the sum and the user’s region.
In terms of security, all funds and deposits before conducting a trade are secured in a 2-2 multi-signature escrow bond and instead of utilizing trading fees, Bisq uses a security deposit of 2% of the trade.
RATING : 3/5
COUNTRY: Panama
Fees: 0.2%
Supported Cryptocurrencies: 300+
IDEX is also a popular DEX platform, but it has some centralized features that make it more of a hybrid exchange.
IDEX users can manage their funds and assets through the use of IDEX Ethereum-based smart contracts that can be accessed through the user’s personal wallet. IDEX offers 4 options to create a wallet: you can use MetaMask or a Keystore downloadable file, you can enter your private keys manually from a third-party personal wallet, or you can integrate a Ledger Nano S wallet. After they choose an option, users must transfer their funds to the exchange to start trading.
IDEX provides its users with a more centralized trading experience than other DEXs. The platform displays different trading pairs and the order book status, and allows users to set up market and limit orders. Similarly to centralized exchanges, the order book is updated in real-time and superbly matches buyers and sellers.
IDEX sacrifices some of its decentralization features by operating through a centralized authority with the exception of the way in which the funds are settled. Users rely on the platform’s functionality to ensure that trade orders are executed. In plain words, IDEX has to verify the trade before it can be executed. To make the trading experience simpler, the platform hosts a smooth and native user interface. IDEX also offers lower fees than the competitive ones that many other platforms use.
IDEX charges two main types of fees, i.e. maker and taker fees. Market makers are charged with a 0.1% fee on any trade while market takers are charged with a 0.2% gas fee.
RATING : 3/5
COUNTRY: Singapore
Fees: 0.10%
Supported Cryptocurrencies: 108+
The Kyber Network liquidity protocol is not a trading platform itself. Instead, Kyber allows users to exchange Ethereum and other ERC-20 tokens instantly. Every transaction is conducted instantly on the blockchain thanks to the platform’s assorted set of liquidity pools, known as reserves.
The Kyber Network allows users to swap any token instantly. For example, vendors who accept a certain cryptocurrency as a payment method could take advantage of the Kyber Network by having their customers send their crypto assets to the exchange and have them automatically converted into the cryptocurrency the vendor accepts. The whole transaction wouldn’t take more than a couple of minutes. Trades are conducted on the Ethereum blockchain and are 100% transparent.
Kyber has a native token called KNC or Kyber Network Crystals. These tokens can be used to pay swapping fees or make in-network decisions. Kyber charges a flat fee of 0.10% on all conversions. One of the platform’s main advantages, besides quick token swaps, is its versatility. The Kyber platform can be integrated with different dApps, wallets, DEX platforms, and individual vendors. Users don’t need to create an account to start swapping on the Kyber Network.
RATING : 3/5
COUNTRY: Switzerland
Fees: No Fees
Supported Cryptocurrencies: 270+
The Bancor Network is, in some ways, a predecessor to the Kyber Network. Bancor is one of the first decentralized apps that was created on the Ethereum blockchain and functions as a non-custodial decentralized exchange that allows swapping crypto tokens without any third parties.
Bancor uses smart contracts to make crypto conversions, including tokens from different blockchains. Like most DEX platforms, Bancor utilizes an AMM protocol that supports the trading of different digital assets and runs on the Ethereum network. The price of the tokens in the liquidity pools is calculated automatically via the AMM protocol.
Bancor also has a native token called BNT token. The token can be purchased from centralized exchanges and used similarly to other DEX tokens. The liquidity pools on Bancor support ERC-20 tokens as well as EOS tokens. When users add liquidity to the platform, they are required to deposit ERC-20 tokens or EOS tokens, as well as BNT tokens, in equal amounts.
The fees on Bancor are similar to Kyber’s fees. When users want to add liquidity or deposit into the ETH/BNT pool, they will be charged a 0.10% fee.
RATING : 3/5
Centralized vs Decentralized Exchanges
Centralized crypto exchanges are platforms where users purchase, sell, and trade digital currencies. When using centralized exchanges, users have to trust a third party to keep track of the transactions and secure the digital assets on behalf of both the buyer and the seller.
Centralized exchanges typically request identity verification checks like KYC (Know Your Customer) in order to unlock the full features they offer. Corporate and private company users would also have to provide their full corporate credentials to verify their accounts. The more personal credentials users provide these exchanges, the more their withdrawal thresholds can increase. Other benefits from a fully verified account include customer support for any issues and password recovery systems.
Moreover, centralized exchanges offer the possibility to purchase crypto with fiat currencies or fiat-to-crypto trading pairs, unlike their decentralized counterparts.
Decentralized exchanges are similar in the way they operate, except that they don’t monitor the transactions and don’t store assets on their networks. Instead, they use an AMM or (automated market maker). This smart contract protocol processes crypto orders by incorporating liquidity provided by traders or liquidity providers. The assets that go through DEXs are stored on the blockchain and only the users have the private keys.
DEXs offer increased asset protection when compared to centralized exchanges since most centralized exchanges keep users’ private keys online, and hackers can easily attack their servers and gain access to them.
A Few Words Before You Go...
We hope that you’ve enjoyed our in-depth article about decentralized and centralized exchanges. We’ve explained the key differences between DEXs and regular crypto trading platforms and made it pretty clear why the surge in DEX popularity has swept across the whole crypto ecosystem.
Anonymity, lower fees, smart contracts, security, private key ownership, and voting tokens are some of the key features that turn users to their services and make them feel like they’re participating in something that’s more than just a store where money is spent in exchange for crypto.
DEX platforms will continue to rise in popularity, especially with projects like Kyber and Curve that aim to revolutionize the way we swap or trade tokens on the blockchain. If you’re looking for a decent decentralized exchange platform, we wholeheartedly recommend you to choose one from our list and try your hand at swapping crypto or becoming a token holder. Just remember that no fiat deposits are available on most DEX platforms, but you can turn to centralized exchanges to purchase any tokens that you think would fit your portfolio.
frequently asked questions
No, Coinbase and Kraken fall into the category of centralized exchanges. Centralized exchanges support credit card and debit card purchases, and most of them provide a mobile app for Android and iOS devices for any remote trading. Most of the centralized platforms are regulated and comply with KYC/AML policies. Users will have to provide detailed information about themselves in order to use the platform to its full potential.
Binance DEX is a subsidiary platform of the Binance US cryptocurrency exchange. The decentralized trading platform is powered by the BNB tokens or Binance Coin. The Binance DEX platform offers lower fees and better security measures compared to the centralized Binance platform but is a bit harder to operate. The Binance DEX platform is more oriented towards experienced users who already have mastered the basics of DEXs.
Generally, users can purchase many different altcoins on DEXs as they constantly update their roster. If a token is rarely used, the platform will remove the support for it and will give way to tokens that users want to trade.