Best Decentralized Exchange (DEX) of 2024

Cryptocurrency exchanges are currently the biggest tools used in the cryptocurrency industry. The first cryptocurrency exchange was created in 2010, and since then many other cryptocurrency exchanges have entered the market, making cryptocurrencies more accessible. However, centralized exchanges have significant limitations that limit their potential for large-scale use. Therefore, the best decentralized exchanges have emerged as useful alternatives for cryptocurrency traders.

The example of centralized cryptocurrency exchanges like FTX sets a wrong precedent for cryptocurrency users. Additionally, frequent complaints about downtime at popular cryptocurrency exchanges like Coinbase paint the cryptocurrency industry in a bad light. Let’s take a look at how decentralized exchanges solve the problems found in centralized exchanges, and a list of popular decentralized exchanges to try in 2024.

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How do decentralized exchanges work?

You can compare different items on the list of decentralized exchanges by gaining a better understanding of their working mechanisms. Decentralized exchanges (DEXs) are peer-to-peer markets that eliminate the obvious single point of failure in centralization. As a result, it helps eliminate most of the risks associated with centralized exchanges.

Wouldn’t this be the perfect solution to the problem of centralized exchanges? Do DEXs only address the risk of a single point of failure? First-generation DEXs aim to replicate the user experience of centralized exchanges and second-hand order books. However, these types of decentralized exchanges have struggled with usability and are expensive and inefficient.

The introduction of Automated Market Makers or AMMs in DEX designs has improved the reputation of decentralized exchanges. Most of the best decentralized exchanges use AMMs, which are smart contracts that can automatically set the price of a cryptocurrency asset based on supply and demand.

The new decentralized exchange allows anyone to exchange tokens in a trustless environment and lock them in liquidity pools. AMM smart contracts are responsible for setting exchange rates and rewards for liquidity providers. At the same time, AMM also provides an intuitive user experience on decentralized exchanges.

The first of the most notable DEXs is 1Inch, which offers the benefits of combining the strengths of various DEXes. 1Inch helps avoid confusion caused by questions like “What is the best decentralized exchange?” Because it is a DEX aggregator.

It works by comparing liquidity across various decentralized exchanges to find the optimal price. Cryptocurrency investors can trust 1Inch with no trading fees or withdrawal fees. 1Inch also supports a variety of cryptocurrency wallets, ensuring better accessibility to the cryptocurrency space.

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Order-based DEXs were not up to the challenge of achieving a better solution to the problem of centralized exchanges. However, dYdX still enjoys popularity among AMM-based DEXs. It offers many features such as selling shirts, leveraged trading, and lending.

Therefore, it is a better alternative than simple AMM. dYdX is a promising addition to the most popular decentralized exchanges, combining multiple features into one package. It offers the advantages of a user-friendly interface, abundant liquidity, and low fees.

Uniswap is a market-leading decentralized exchange with a broad user base. We provide liquidity to the most popular cryptocurrency tokens and leverage AMM for self-regulation. DAO governance makes Uniswap one of the best decentralized exchanges with better efficiency and transparency.

Additionally, Uniswap is the world’s first decentralized exchange that offers flexibility in ERC20 token trading. Uniswap also has its own token, UNI, which allows holders to provide liquidity to exchanges and earn rewards. However, it has some limitations, such as providing support only for EVM-compatible crypto tokens.

PancakeSwap, as the name suggests, has some similarities to Uniswap and other AMM-based decentralized exchanges. This is Binance Smart Chain’s most innovative solution, contributing to lower gas costs for users. PancakeSwap is a worthy contender in the list of decentralized exchanges that focus on user experience.

Users can also earn rewards while leveraging the flexibility of yield farming by staking native tokens on PancakeSwap. Most importantly, it offers faster transactions than Uniswap and a variety of user-friendly features, making it the best DEX.

The next famous name among the largest decentralized exchanges is Curve Finance. In fact, Curve Finance is the second largest decentralized exchange on Ethereum in terms of TVL. Initially, it only provided stablecoin swap functionality. However, it has now evolved and offers many trading pairs.

On the other hand, Curve Finance’s optimization for stablecoin trading is the best option for low slippage rates. Another impressive feature of Curve Finance is its support for multiple blockchains, with increased efficiency for large transactions.

Balancer is another popular choice for decentralized exchanges due to its unique features. An excellent answer to questions like “What is the best decentralized exchange?” This is because of its features that help users manage their diverse portfolios. DEX gives you the flexibility to create and join pools using any combination of eight different crypto tokens.

Balancer is a decentralized exchange ideal for anyone looking to manage a diverse portfolio of crypto assets. Balancer also meets the needs of traders seeking advanced strategies to provide liquidity. Exposure to a variety of assets opens up the potential for compound returns.

Another popular offshoot of Uniswap that has gained popularity for its unique feature set is SushiSwap. The main goal of creating SushiSwap was to provide a better alternative to Uniswap with better rewards.

However, we have developed a unique identity with a variety of features for our users and a special theme to brand the user experience. SushiSwap users can exchange assets and provide liquidity while borrowing or lending assets. It also follows the lines of a decentralized exchange that offers the privilege of participating in protocol governance.

Orca’s goal is focused on overcoming the pitfalls of centralized crypto exchanges, including ensuring faster and more secure transactions. Solana is one of the most popular decentralized exchanges with the flexibility to trade cryptocurrencies on the blockchain. Orca’s most notable feature is its innovative UI that helps users change language settings and view token balances directly on the DEX.

Moreover, Orca has proven to be the best choice for traders who prefer anonymity. Users can also take advantage of transacting directly from their wallet and reduce the risk of losing funds due to hacking or third-party mismanagement.

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Perhaps the most interesting origin story among decentralized exchanges belongs to Vertex. This is a perfect example of how the best decentralized exchanges can cope with any adversity. Vertex was created on the Terra blockchain, which suffered a catastrophic failure. However, the decentralized exchange did not stop there and shifted all operations to the Arbitrum blockchain.

Vertex has undergone major changes to its overall structure and goals. One of the most interesting features of Vertex is the option to connect to eight different blockchains ensuring interoperability. It also provides a faster order matching mechanism that can improve the efficiency of cryptocurrency trading.

Any collection of the best DEXs would be incomplete without the addition of the Apex protocol. It gained popularity by providing a resilient AMM. Apex Protocol is also one of the best decentralized exchanges with order book trading capabilities. Beginners can also take advantage of the flexibility of spot trading on the platform.

Another unique feature of the Apex protocol is the Starkware layer 2 scalability mechanism, which also addresses security issues. In fact, the Apex protocol has gained popularity for offering improved privacy and security features.

How do I choose the right DEX?

As you can see, there are several decentralized exchanges on the market with innovative features. Therefore, it is important to distinguish between the best decentralized exchanges to find the ideal choice that suits your needs. Interestingly, several factors can help you choose the best DEX for your needs.

First of all, you need to check the blockchain on which your decentralized exchange operates, as this determines its level of interoperability. Another important criterion for evaluating decentralized exchanges is liquidity. If there is not enough liquidity, traders may have to face the negative consequences of a drawdown.

You should also evaluate decentralized exchanges based on whether they are public or permissioned. For example, certain DEXs only allow community members to add new liquidity pools. Most importantly, you can compare the best DEX based on their security features.

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final words

The growing popularity of decentralized exchanges has become a hot topic in the cryptocurrency industry. It is more efficient, safer and faster than centralized exchanges. Most importantly, the ever-expanding list of decentralized exchanges offers new options for staking and yield farming.

DEXs like Uniswap, PancakeSwap, SushiSwap, 1Inch, and Vertex are playing a big role in the market. As demand for decentralized exchanges continues to grow, that number may grow beyond the hundreds and into the thousands. Learn more about the working mechanisms of decentralized exchanges and best practices for using them today.

*Disclaimer: This article should not be considered, and is not intended to provide, investment advice. The statements made in this article are not investment advice and should not be taken as such. 101 Blockchain is not responsible for any loss suffered by anyone relying on this document. Do your own research!