Best Decentralized Exchanges (DEX) 2022

With every passing minute, people are becoming more concerned about their privacy on the Internet, which is why more and more users are turning to exchanges decentralized, a way to invest in cryptocurrencies anonymously, safely and cheaply.

In this article we are going to tell you what are the exchanges decentralized, what characterizes them and what are the main platforms in this sector.

What are exchanges decentralized (DEX)

The exchanges decentralized, also known as DEX by their English name, are a newer version of the exchanges conventional centralized. In these cases, the entire internal functioning of the platform is carried out on the blockchain, help smart contracts, which eliminate intermediaries, improve security and increase investor confidence.

Origin of DEX

The world of crypto-currencies has changed very quickly since the appearance of Bitcoin, and the first exchanges like Mt Gox were centralized. This means that all operations are managed by the same entity, but not only, but it is this platform that stores your assets and those of all users.

Over time, this turned out not to be an efficient way to work with cryptocurrencies, as hackers only had to break through a platform's security barriers to gain access to cryptocurrency funds. thousands of people.

For this reason, starting in 2013, decentralized versions of exchanges Well-known centralized platforms began to be developed, and some of the first to hit the market were OmiseGo and BitShares.

DEX-types

Since the appearance of the first DEXs, the crypto-currency environment has undergone a real revolution, giving rise to 3 generations of exchanges decentralized:

1. First generation: These first exchanges are intermediate versions between what is now called centralized and decentralized. To work with them, you must send your cryptocurrencies, deposit them temporarily on the servers of exchange, then remove them.
2. Second Generation: In this generation of DEX, smart contracts are introduced for the first time , protocols that store information to perform a series of actions on the blockchain. In this way, they are the ones in charge of carrying out the exchanges, although again you lose possession of your cryptocurrencies for a certain period of time.
3. Third generation – The latest generation of exchanges decentralized is an improvement over the previous generation. Smart contracts are still used to make the exchanges, although this time the cryptocurrencies remain in your wallet throughout the exchange process, improving user security.

DEX Features

Some of the most notable features of decentralized exchanges are :

• Anonymity – You don't need to register or even give any personal information to start trading with them. Just connect a portfolio compatible or a cryptocurrency wallet for investing.
• Non-custodial: since to operate with them you only have to connect the wallet, it is you who permanently keep possession of your cryptographic assets.
• Safety: the use of smart contracts improves the security of platforms, as they can block and stop operations in seconds if they perceive that something is not working as it should.
• AVAILABILITY - Centralized exchanges often reston a single server to keep their platform online, so a system failure can leave millions of users without service. DEXs, on the other hand, don't work with a single server, so it's a lot more complicated for that to happen.
• Low fees – DEX fees are really low, and sometimes you just have to pay the fees required by the blockchain.
• Automated - The exchanges decentralized ones have no intermediaries, which improves the speed at which transactions are made.
• Offers: as a rule, these types of exchangers have a very wide variety of tokens and cryptocurrencies. Also, in some cases, you can operate with unlisted tokens by providing the contract address.
• Governance – Most of these exchanges allow users to be involved in making decisions about the fate of the platform. To do this, they have their own tokens with which users gain voting rights by the simple fact of HODL.

Most Important DEXs

The market for blockchain has grown very rapidly over the past decade, which is why more and more of exchanges decentralized emerge with very interesting proposals. Although we cannot analyze them all, here are the main ones:

Curve

Corners is a exchange decentralized very similar to the rest of the DEX that we are going to talk about in this article, but with the particularity that it focuses on trading assets in a 1:1 relationship with fiat currencies.

For this reason, Curve is a unique platform and one that many investors greatly benefit from. However, this platform is not for you if you are looking for a exchange to buy and sell cryptocurrencies like Bitcoin, Ethereum or Cardano.

Curve has its governance token, the CRV. With it, users can contribute liquidity to the platform, but also participate in the votes that take place there.

Swap Pancakes

Swap Pancakes is a DEX that operates on the Binance Smart Chain (BSC) and stands out from the competition with its large number of assets and low commissions.

This stock Exchange decentralized offers a large number of options to investors; token exchanger, ability to provide liquidity, yield farming and even to use NFTs as a profile picture.

Additionally, PancakeSwap has its native token CAKE, which is currently in the top 30 on CoinMarketCap. Of course, its main function is to provide liquidity, although it is also used to access platform votes.

Uniswap

Uniswap is a exchange decentralized platform that offers users the ability to instantly trade any ERC20 asset. It does this by using the liquidity that users contribute to the system in exchange for rewards of up to 1% of the commission paid by other investors.

In 2020, they launched the native token of the platform; Uniswap (UNI). Like most Exchanges, this token has governance features, although it has also performed quite well in recent months, rising from $3 to over $40.

Sushi Swap

Sushi Swap is a exchange very similar to Uniswap, and in essence we could say that it is the same platform. The changes between the two are quite small, and in the same way as the previous one, it is used to exchange Ethereum(ERC20) tokens.

In addition to providing the ability to provide liquidity using liquidity pools, SushiSwap offers other ways to get very interesting returns, for example its farms Yield farming.

Just like Uniswap, SushiSwap has its native token, SUSHI. However, its main function at present is to provide liquidity, as functions such as a governance token have not yet been developed.

MDEX extension

MDEX is one of the largest DEXs in the world by trading volume, and its primary value proposition is to be a inter-chain exchange. but what does that mean?

MDEX currently supports cryptocurrency transactions with Binance Smart Chain (BSC), Ethereum (ETH), and Huobi ECO-Chain (HECO) protocols, enabling interoperability between networks. In addition to all this, MDEX also allows its users to bring liquidity to the system, make trades, trade…

Just like the others exchanges mentioned, MDEX has its own token that runs on the Binance Smart Chain, Mdex (MDX). In the near future, MDX should play an important role in the governance of the platform.

1 inch

1inch is one of exchanges most interesting decentralized of the moment, because in addition to being an exchange itself, it is a search engine for offers. In other words, the 1-inch mechanism searches through a series of exchanges decentralized to offer you the most advantageous operation possible at all times.

Additionally, 1inch not only allows trading with cryptocurrencies, but also has options for providing liquidity to the system (shared with the rest of the DEX it works with) and for trading. Yield farming.

1INCH is the native 1inch token, and although its primary function is governance, you can also bring liquidity into pools and participate with them.

DEX Security Are they secure?

Of course, before using any type of platform to invest in cryptocurrencies, you must ask yourself if it is really safe. The exchanges decentralized stand out because they do not receive your cryptocurrencies at any time, so ultimately your security depends on your portfolio.

Additionally, all operations are encoded in smart contracts, a type of protocol that implicitly performs actions that are only executed if certain events occur, so that your operations are secure.

Operating Costs on Decentralized Exchanges

If you are interested in investing in one of these decentralized exchanges, you're probably wondering what fees they have, right?

Most DEXs have very low commissions, and although it depends on the exchange you choose, they are usually lower than any exchange centralized.

Specifically, the costs associated with operating a exchange decentralized are: the blockchain fee and a small fee to reward liquidity providers in the market (only on certain occasions).

Conclusion

In short, the exchanges Decentralized (DEX) are platforms with very high potential and which offer users multiple forms of investment with the same asset.

This way of investing in cryptocurrencies via DeFi has a series of very interesting advantages, although the main ones are undoubtedly: security, anonymity and low commissions. However, they also have some limitations; there is not always liquidity, some do not allow the use of programmed orders and are more complicated to use.

Urban artist to use a exchange decentralized, you must own cryptocurrencies beforehand, which can be a barrier to entry for new users.

However, if you already know how to invest in cryptocurrencies and want to take your profitability to the next level, you can start using some of these platforms to bet, provide liquidity to the market, make yield farming or even participate in a platform's lending programs.