The Top Decentralized Exchanges(DEXs) in 2021

Article about The Top Decentralized Exchanges(DEXs) in 2021

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Jul 30, 2021

Decentralized Exchange is a kind of cryptocurrency exchange that allows users for peer-to-peer cryptocurrency transactions to take place online securely and without the need for a middleman. Users do not need to transfer their cryptocurrencies (digital assets) to the exchange. It reduces the risk of theft and hacking of centralized Exchanges. 

What is a Decentralized Exchange:

Decentralized exchanges are one of the key building blocks of the decentralized finance (DeFi) ecosystem. A DEX is a platform where users can trade cryptocurrency directly with each other, without using a middleman. A traditional centralized exchange like Binance, for example, acts as a custodian on your behalf, with any trading taking place on Binance’s database, rather than directly on the blockchain itself. 

While this is a more beginner-friendly way to trade, it has its downsides. For one thing, a centralized exchange presents a single point of failure, meaning that you could lose access to your funds if the exchange is hacked or faces server problems. Indeed, many centralized exchanges have struggled with downtime during periods of extreme volatility.

Theres also the fact that many centralized exchanges require KYC authentication, which means you’ve got to provide proof of ID such as a driving license or passport (which, again, means trusting that the exchange wont be hacked, potentially exposing you to identity theft).and your identity details stolen


What is Uniswap?

Uniswap is an Ethereum-based DEX that allows users to swap ERC-20 tokens. It’s one of the most popular platforms in the DeFi ecosystem, and aims to counteract one problem that’s associated with DEXs—a lack of liquidity.

It does this by allowing tokens to be swapped, which means the platform doesn’t have to rely on buyers and sellers creating liquidity (and all without charging platform fees in the process). Created in 2018 by former Siemens mechanical engineer Hayden Adams, the exchange has grown in popularity, reaching an average daily trading volume of $337 million as of June 2021.


What is SushiSwap?

SushiSwap is a DeFi platform running on the Ethereum blockchain that allows users to directly swap tokens with each other. Holders of the platform’s native token, SUSHI, can propose changes to how it operates, voting on proposals submitted by other users. Created in 2020 by the pseudonymous “Chef Nomi”, the platform was created by copying Uniswap’s open-source code, promising users SUSHI token rewards for locked funds. 


What is PancakeSwap?

PancakeSwap is another Uniswap clone built on the latter’s source code. Rather than operating on the Ethereum blockchain, however, PancakeSwap is powered by Binance Smart Chain, allowing users to directly trade its BEP-20 tokens and dApps.

It’s operated by a group of anonymous developers, but users control the platform by voting using the CAKE governance token. Starting off slow, the platform shot up in popularity earlier this year following the Ethereum network’s steep hike in fees. PancakeSwaps 24-hour volume currently sits at around $13 million.


What is 1inch?

1inch stands out from the pack, as it’s principally a DEX exchange aggregator. In essence, it scrapes other exchanges to automatically provide users with the cheapest prices, rerouting your trades via the exchanges that offer the best prices and overall fees for the transaction you want to make. Version two of the platform launched in November 2020, supporting 21 different DEXs, including SushiSwap and 1inch’s own AMM, the 1inch Liquidity Protocol (formerly known as Mooniswap).


What is Compound?

Founded by former economist Robert Leshner in 2017, Compound is a specialized DEX that allows the tokenization of assets locked in its platform. To do this, it uses cTokens, which let users earn interest on their stored assets while also still being able to transfer, trade and use those assets in other applications. 

Locking USDC in the protocol, for example, provides you with cUSDC tokens, which can earn you interest. You’re free to redeem your cUSDC tokens for regular USDC at any time, which includes any interest paid in USDC.

Curve Finance

What is Curve Finance?

Curve Finance is a DEX specifically designed for swapping between stablecoins, as well as exchanging different tokenized versions of stablecoins. 

The platform acts as a decentralized liquidity aggregator, where any user can add assets to different liquidity pools, earning fees in the process. The CEO of Curve Finance is Michael Egorov, CTO of network security company NuCypher, who’s also the individual to whom most of the project’s GitHub contributions are attributed.

Source From : The Top Decentralized Exchanges (DEXs) in 2021 | Decrypt

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Articles authored by alex jaxon

Published: Sep 8, 2021