Decentralized finance has tremendously grown in the cryptocurrency market. The first decentralized exchange came to life in 2014, and there are more than 35 decentralized exchange platforms that are still growing. The growth of decentralized exchanges primarily impacts the exchanges sector where cryptocurrencies are traded. There is a massive demand for decentralized exchanges whose demand is growing and is expected to continue growing. Decentralized exchanges have become a significant threat to centralized exchanges for cryptocurrency. The growing demand for decentralized exchanges has brought uncertainties to centralized exchanges. Decentralized exchanges have numerous benefits, and that’s why many crypto traders are now preferring them to centralized ones.
In this article, we will be looking at the top 10 decentralized exchanges in 2022, but first, let us look at the benefits of decentralized exchanges.
Benefits of Decentralized exchanges
Cheaper Transaction Fees
Decentralized exchanges offer lower transacting fees when compared to centralized exchanges. Crypto traders continuously look for lower transaction rates when trading their crypto. In this case, DEX is always the primary choice because you have an option to check for lower rates to sell your assets. DEX has brought competition to the exchange market, and when there is competition, many will offer incentives such as lower trading prices to have a chance to compete in the market and attract more traders.
Lower Counter-Party Risks
DEX has more inferior to minimal chances of being hacked, and there is an ownership guarantee. Centralized exchanges lack ownership guarantee and have been severally hacked over the years. Decentralized exchanges are more protected as crypto trading is done between people in an automated process in decentralized exchanges without depending on intermediary institutions.
Decentralized exchanges is a fair ecosystem and much more inclusive. Anyone and everyone across the globe can utilize this service and perform their trades.
Too much data is collected on us, and privacy has become more critical. There is no requirement to provide personal information to third parties and no requirements to use the exchange.
Dex might not have gotten to its full potential, but more growth is potential over the years. You might want to know the top 10 decentralized exchanges to trade your crypto.
Top 10 Decentralized Exchanges in 2022
These are the undisputed kings of decentralized exchanges. This was the first DEX to reach a popularity and trading volume level that some of the best-centralized exchanges have not achieved. The launch of Uniswap occurred in November 2018, and it has undergone several upgrades. Its third version is up and running, bringing multiple fees tiers, improved efficacy in the capital, and better oracles.
Uniswap is among the pioneer automated markets and allows its users to take up the role of liquidity providers through their contribution of assets to decentralized liquidity pools. The liquidity providers net a passive income because they share a fraction of the fees the collection generates. Since the launch of Uniswap, it has clocked over $800 billion in trading volume and hosted one of the most profitable airdrops.
2. Pancake Swap
From its whimsical name, it sounds like a joke, but it is not. It is the most popular swap platform on Binance smart chain and has clocked over $300 million in daily trading volume. The Pancake swap team directly bootstrapped pancake swap without raising any money on ICO or IDO.
Currently, the platform is supported by the Pancake Swap treasury, which earns a commission of 12% on all trading fees. Pancake Swap accepts thousands of BEP-20 tokens and has its governance token, CAKE.PancakeSwap offers various yield farms, a Binance Coin prediction market, a lottery game, initial farm offerings, an NFT market, and more and its DEX capabilities.
Michael Egorov formed a curve that uses highly efficient bonding curves that enable users to trade stable assets with little slippage. The platform offers a great exchange solution that allows users to sell stable coins at a minute fee of 0.04%. Curve was first deployed on Ethereum in 2017, but it has expanded to other blockchains such as polygon, avalanche, and fantom. It has risen in the DEX industry and clocks in billions of dollars in trading volume every month.
You might be a fan of sushi or not, but it has something that might interest you. The DEX is a fork of the renowned Uniswap protocol that permits dealers to trade assets across over a dozen blockchains and layer-2 platforms.
The platform was among the first DExs to launch on the Avalanche, Fantom, Harmony, and Celo blockchains and has earned a reputation for being one of the first DExs to embark on new chains.
Sushi Swap is an automatic market maker that allows users to make money by contributing liquidity to the site. It comprises a variety of features, such as a variety of yield pools, an on-chain lending solution, and a MISO launchpad. Sushi Swap, like most DEXs, has a utility token known as SUSHI. This token can be placed to receive a portion of the platform’s trading fees and partake in the platform’s governance.
5. Spooky Swap
Halloween may be seasonal but Spooky Swap is here to stay. Spooky Swap is the most popular decentralized exchange on the Fantom opera blockchain, making it an essential feature in all fantom trader’s toolboxes. It allows the trader to liquidity their assets instantly or bid and wait for their order to be filled.
Analysis shows that spooky swap clocks in $300 million in daily trading pools and have assets worth up to $1.5 billion in its collections.
6. 1 inch
1inch collects decentralized exchanges and puts them together for the customers, and therefore you always get the best rate for Swap. It is available on numerous blockchain networks and does not charge additional fees. Anyone who receives a CHI token on 1inch also gets a massive reduction in the transaction cost.
7. Kyber Swap
Kyber swap is similar to uniswap because it operates on liquidity pools provided by traders in return for a 0.3% trading fee when the pair is used. Kyber has its token called Kyber network crystal used in governance and in claiming the earned trading fees. Various decentralized financial applications depend on Kyber as their underlying protocol as it has among the deepest liquidity pools of the best-decentralized exchanges.
It operates on the wave blockchain. WaveDEX owns assets called waves, with which you can trade a supported asset for another supported asset, such as bitcoin for wave. A centralized matching service speeds up the exchange process, allowing you to get the best from centralized and decentralized worlds. This is an effective combination for mitigating slippage.
IDEX is another decentralized exchange, and it operates on the Ethereum blockchain. IDEX, a decentralized exchange, uses the Ethereum blockchain. IIDEX is a decentralized exchange running on the Ethereum blockchain. IDEX is the first Ethereum based decentralized innovative contract exchange for supporting present trading. IDEX is considered the most advanced Ethereum DEX. It helps control and sells orders, has the capacity to conduct many trades simultaneously, and gas-free cancels. The exchange comprises the trading engine, the smart contract, and a “transaction processing arbiter.” The smart contract is responsible for storing all assets and executing trade settlements. The user has to verify all trades using their private keys.
Airswap is a cryptocurrency that runs on the Ethereum blockchain and has its token called Airswap Token (AST). AirSwap established the Swap Protocol to allow for transaction-free trading. The Swap Protocol leverages smart contracts on the Ethereum network to settle orders. The rest is taken care of off-chain. This is similar to 0x. AST, like Uniswap, primarily serves as a way for market makers to set markets on AirSwap, providing liquidity for the exchange.
How Decentralized exchanges work
Most decentralized exchanges are open source initiatives based on the Ethereum blockchain that use smart contracts to carry out the customers’ requested digital asset trades. They attempt to be cross-chain interoperable to maximize the number of trading pairs so that you can trade any asset you want. Because there is no central authority supporting the transaction, trading costs are substantially cheaper, if they exist at all.
In general, making a trade is a simple process: you choose the asset you have and the one you want to trade for it, then follow the procedures, which typically entail sending your holdings to a smart contract and selecting a destination wallet address, and it handles the rest. Your new assets are delivered to the address of your choice.
What to look for in Decentralization Exchange
Ease of use, trading costs, trade volume/liquidity, anonymity, and trading pairings are the primary features of a decentralized exchange.
If the asset price fluctuates because the deal takes a long time to be fulfilled, or you’ve placed an enormous order, you may receive more or less of your desired asset, referred to as slippage.
The best-decentralized exchanges have low costs, many trading pairings, and simple point-and-click swaps that occur instantly, ensuring consistent deals.