Decentralized exchanges, or DEXs, are peer-to-peer platforms where cryptocurrency traders can execute transactions without entrusting their funds to a third party. These transactions are made possible via smart contracts, which are self-executing agreements written in code. The initial DEX was very slow. In 2018, a new generation of DEX gained prominence. Instead of buyers and sellers, they utilize automated market makers, asset prices governed by permissionless protocols, and liquidity pools. Fast forward, decentralized exchanges have grown tremendously in popularity.
In this article, we will discuss top DEXs to invest in; while we believe they’re sound investments, we are not providing expert financial advice, and anybody who purchases anything we recommend is solely responsible for any funds earned or lost.
SushiSwap (SUSHI)
SushiSwap is a DEX that makes use of the Ethereum blockchain for automated market-making (AMM). It’s also non-custodial, which means it doesn’t require tokens to trade them, unlike centralized exchanges. Users can instead trade in a safe peer-to-peer environment with liquidity offered by other users.
Liquidity providers contribute to SushiSwap pools by connecting their Ethereum wallet to the SushiSwap farming software and locking two assets into a smart contract. SushiSwap’s USDTETH liquidity pool, for example, is made up of deposits of equal value in USDT and ETH. It also provides, among other things, yield pools, an on-chain lending solution, and a MISO launchpad.
SushiSwap has developed SUSHI, its own utility token. This token can be staked in exchange for a share of the platform’s trading fees as well as participation in governance.
Curve Finance (CRV)
Curve was first launched on Ethereum in 2017, but it has now grown to incorporate a number of other significant blockchains, including Avalanche, Polygon, and Fantom, as well as other layer-2 solutions. Its goal is to increase the efficiency of stablecoin trading.
Curve facilitates trading using the AMM protocol. AMMs use algorithms to efficiently price tradable assets in a liquidity pool. It functions in a similar way by allowing participants to add liquidity to their pool. For providing liquidity on the Curve platform, these liquidity providers are compensated with CRV. To utilize your CRV, you must first lock it for a specified amount of time. Users that stake their token will also receive a percentage of the Curve protocol’s trading costs.
Curve has pioneered the way for the DEX market, earning several billion dollars in monthly trading activity despite its retro appearance.
PancakeSwap (CAKE)
PancakeSwap is a decentralized exchange and Binance Smart Chain AMM for trading BEP20 tokens. Its team bootstrapped the company rather than using an ICO or IDO to raise funding. The PancakeSwap Treasury, which receives a 12 percent commission on all trading fees, is now funding the site.
The DEX supports thousands of BEP-20 tokens and also has its own governance token, CAKE. CAKE crypto can be purchased and held as a long-term investment. They can also stake it or use it to generate trading liquidity in exchange for large payouts. Another way to make money is to engage in yield farming. With this, you can farm for a token called CAKE. In addition to its DEX features, PancakeSwap offers a Binance Coin prediction market, a lottery game, initial farm offerings, an NFT market, and more.
dYdX (DYDX)
dYdX is a layer-2 decentralized trading platform built on Ethereum that enables a variety of financial products such as perpetual, margin, leveraged, and spot trading. It allows bidirectional trading by combining off-chain order books with an on-chain settlement layer. It also offers borrowing and lending services.
The excitement surrounding dYdX has grown as the exchange finally offers a decentralized alternative to the eternal exchanges BitMex, FTX, and Bitfinex. The project allows traders to manage their portfolios, earn incentives, and obtain cost reductions based on their trading volume. The ERC-20 governance token for the dYdX derivative platform is DYDX, which may be used in the governance process as well as for-fee savings. Token holders have the ability to vote on whether or not a proposal is adopted by the community, which has implications for the platform’s future.
MDEX (MDX)
MDEX is a DEX protocol built on Huobi Eco-chain (HECO), Binance Smart Chain, and Ethereum. It aspires to be the best eco-token transaction alternative as well as the largest DeFi ecosystem by combining DEX, IMO, and DAO.
It also allows for a dual/mixed mining process, which guarantees users’ liquidity and ensures secure transactions. In order to establish a high-performance compound DEX ecosystem, MDEX also aims to foster chain cross-chain compatibility.
The project’s governance token, MDX, contributes to the success of the blockchains upon which it is built. Liquidity pools are one of the Mdex system’s key protocols that give investors a variety of opportunities to profit. Users receive LP tokens based on the amount of MDEX they lock.
ApolloX DEX (APX)
It is the first CEX-DEX hybrid crypto derivatives exchange, founded in 2021. APX is ApolloX’s native token. The overall supply of APX is 10 billion, with 2.5 percent set aside for PancakeSwap trading. The DEX aims to make derivatives trading more accessible and anonymous. Users can use up to 100x leverage to trade USDT-based perpetual contracts.
The ability to trade from cold storage to cold storage makes ApolloX DEX one of the safest exchanges on the globe. It has additional security features like two-factor authentication and addresses whitelisting.
Apollo’s patented atomic swap technology enables trades to take place on the blockchain without the need for human involvement.
Summary
Decentralized exchanges have a bright future, regardless of their current state. This is because they are highly regarded for the enhanced privacy, firmer security, and increased user control they offer to investors. While the Ethereum network continues to see the most DeX activity, it will continue to extend to other blockchain platforms as well. In this article, we have discussed the top best DEX projects.
