Cryptocurrencies have developed into a project that allows you to send money across borders with ease, while also presenting you with an excellent investment opportunity. While Bitcoin was the first of all cryptocurrencies, we have seen many additional options rise in the last few years. By the start of 2017, a study reported that 720 cryptocurrencies had been developed since 2009 when Bitcoin was initially announced. As of 2020, the number of cryptocurrencies and altcoins combined has grown to over 5,000.
There are numerous ways to invest in cryptocurrency or use these digital currencies to send money. Many people are becoming more aware of the security risks involved with some of the more “traditional” options, leading to an increased demand for decentralized exchanges. We look at the five best-decentralized exchanges on the internet today.
Why Choose A Decentralized Exchange?
With a more traditional exchange system, there is a central authority that is responsible for holding your funds. This is where the concerns related to security matters come in. Due to the involvement of a third-party “central” system, there remains a risk – especially if you have large funds that are being held by the authority.
A decentralized exchange essentially changes the way cryptocurrency transactions conducted. These platforms do not use any type of central authority – no third-party system holds your currencies. Instead, the system gives you the ability to make direct peer-to-peer transactions.
These networks often called DEX’s. The term DEX refers to Decentralized Exchange.
With a conventional exchange, news publications related to agents being malicious when there is a third-party central system involved have risen. This has caused a lack of trust in the crypto community. By switching to a DEX for exchanges, the security risks, worries about untrusted agents, and problems related to hackers are essentially avoided.
Sure, there are a few downsides too. A DEX generally comes with reduced speed compared to a conventional exchange system, but most people will find that the improved security outweighs the cons.
5 Best Decentralized Exchanges
There are quite a few launched decentralized exchanges. This gives you a wide selection of platforms to choose from when performing a peer-to-peer cryptocurrency exchange. You should, however, still do your research – ensuring you choose a trusted and reliable platform.
We looked at top-rated options on the market to bring you the best DEX platforms that you can rely on today.
Also known as Uniswap Exchange Protocol, this one is generally considered an appropriate solution for people who already have some experience in the market. Many find that the Uniswap platform is difficult to comprehend. The system has a unique approach to providing a decentralized exchange protocol – but it does reverse the way that most people approach factors like order books and other essential exchange factors.
The Uniswap system mixed different orders into one system. An Automated Market Maker, also called an AMM by the platform, used. The liquidity involved in the exchange transaction combined, after which it is split into two new categories.
This system is ideal for people who are readily willing to learn about a new way of creating cryptocurrency exchange transactions, but it is generally not for beginners. A thorough understanding of how cryptocurrency and exchanges work is important. On the plus side, the system does provide superior security and a truly decentralized network to utilize.
Switcheo is currently has one of the best user interface when it comes to DEX platforms with many new coins being added weekly. It is an international platform that allows for the easy exchange of common cryptocurrencies. The Switcheo platform has grown significantly in just one year. More than 42,800 cryptocurrency traders are currently relying on this system to initiate trades – and the number is continuing to grow throughout 2020.
Switcheo has recently integrated its system with the Uniswap V2 Liquidity Reserves, further pushing the boundaries of what the platform is able to offer.
There are several key factors that the Switcheo platform focuses on. This includes instant onboarding, making it exceptionally easy for the average crypto user to initiate an exchange on the platform. The second is to provide a system that is based on true decentralization. This means adding a high level of security to the system, which helps to ensure every transaction made on the platform is safe.
The Switcheo team developed an easy integration with existing cryptocurrency wallets such as the Ledger Nano, Trezor, MetaMask and more for the highest form of safety and decentralization. It also follows an open market protocol. The TradeHub platform allows for instant execution of crypto trades while minimizing the fees charged on these transactions.
3. Binance Dex
Binance has become the world-leading and most trusted platform for cryptocurrency exchanges. The initial Binance platform is based on a centralized system, where funds are held by the company. With the increase in demand for decentralized movements, Binance has recently announced their own version of a DEX system.
The launch of Binance Dex has brought a decentralized exchange system for people who are already familiar with their conventional system. The Binance Dex platform is not as decentralized as some of the alternatives but designed to ensure the user gets to hold and manage their own funds, while also prioritizing a system where security becomes the priority.
The ERC-20 Binance Exchange Token burned gradually following the announcement of a decentralized exchange platform by the company. The ERC-20 BNB tokens then replaced by the new BEP-2 token format. The original Binance Chain used by the newer BEP-2 token format. The DEX platform by Binance developed to offer a familiar UI compared to existing centralized exchanges.
4. Pancake Swap
Pancake Swap is a new upcoming exchange that has nearly surpassed the volume of Uniswap at the time of this article. It’s based on the Binance smart chain, so you can easily swap Binance based tokens. As the Binance chain is not as clogged up as Ethereum, the fees are much cheaper and doable for everyone. This is one of the main factors on the growth of Pancake Swap Exchange.
They have a bunch of features that other DEXs do not have such as the Lottery. This is new for Crypto, go check it out.
Kyber is also known as the Kyber Network or the Kyber Protocol. It is a unique entry in this list, as it can be stacked on an existing blockchain. The Kyber platform also works differently from other decentralized exchanges that you may already be familiar with – but it does offer a powerful system to make exchanges much more secure.
Liquidity providers are approved on the Kyber Network, which will then list the appropriate token pairs. Takers can utilize these pairs – quotations are provided form multiple Reserves to the takers, ensuring they get the best price on their exchange. This system is only compatible with smart contract systems.
Decentralized exchanges offer enhanced security, at the cost of slower transaction speed. These platforms can help you overcome some of the main issues people have with a more traditional cryptocurrency exchange, but there are already many options in existence. We looked at the five best-decentralized exchanges that you can use if you wish to become active in the world of cryptocurrency.