In this article I’ll explain what a DEX is and what are the best DEXs to choose from. This way you know exactly where you can buy your crypto coins in a decentralized way! We also tell you per exchange how much transaction costs you have to pay if you are the buyer or seller of the crypto coins and tokens.
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However, many popular exchanges do have one thing in common, and that is they are all centralized crypto exchanges. This means that all data from the exchange is stored on a central server. Is that bad? Not at all. However, you can call it remarkable, because there are some popular exchanges that offer coins on a decentralized system. It is therefore also possible to buy crypto coins on a decentralized crypto exchange ( DEX ).
List of the best-decentralized exchanges to buy your crypto coins and tokens.
Created by Hayden Adams, Uniswap is one of the most popular decentralized exchanges at the moment. Anyone can buy and sell tokens and coins on the platform without registering or going through a Know Your Client (KYC) process, as is the case with centralized exchanges.
The main advantage of Uniswap is that it is a working alternative to centralized exchanges. However, the differences between decentralized and centralized exchanges are palpable as this technology is still in its infancy. After all, blockchain is still very new, and Uniswap runs on the blockchain.
Uniswap is designed to operate as a public crypto exchange with no fees or intermediaries. Unlike most exchanges that set prices and make trades based on supply and demand, Uniswap uses a mathematical equation and liquidity pools.
How does Uniswap work and why is it one of the best-decentralized exchanges (DEX) in 2021
The main difference between Uniswap and other decentralized exchanges is what is called the “Constant Product Market Maker Model”. This pricing mechanism allows any ERC20 token to be traded on Uniswap as long as it is funded with an equal value of ETH.
For example, if you wanted to trade TRON, you would launch a Uniswap smart contract for that token and create a liquidity pool with $100 USD in TRON and $100 USD in ETH. Rather than linking buyers and sellers to determine the price of the token, Uniswap uses a constant equation: X * Y = K.
In this equation, X and Y represent the number of ETH and ERC20 tokens available in a liquidity pool, while K is a constant. As such, the balance between ETH and the token, as well as the principles of supply and demand, are used to determine the price of TRON.
If someone buys the token, the price will go up. This means that the tokens on Uniswap can only change when transactions take place. This is comparable to a “market” order on centralized exchanges. Therefore, Uniswap balances the value of the tokens and exchanges them based on the people who want to buy or sell them.
What is the UNI token?
The UNI token was initially created to prevent users from switching to a rival decentralized exchange called SushiSwap (which we’ll talk about later in this article). A month before the launch of the tokens, SushiSwap incentivized users to transition to their platform by rewarding users with tokens for transferring their investments.
Uniswap responded by creating 1 billion UNI tokens and decided to pay out 150 million to anyone who had already used their platform before September 1. However, the token was not entirely useless. It was a new kind of token that gave users administrative rights over the new protocol and also a proportionate share of the transaction fees paid to the platform.
Uniswap Cost and Fees
Uniswap charges users a flat fee of 0.30% for every trade that takes place on the platform and automatically deposits it into a liquidity reserve. When a liquidity provider decides to exit the reserve, it receives a share of the total consideration from the reserve in proportion to the amount it has placed in that pool.
1inch is one of the many decentralized exchanges in our world. On this DEX it is possible to trade crypto coins and tokens. The site lists the major decentralized exchanges and bundles the liquidity and quotes they provide for a very large number of ERC20 tokens.
To allow you to trade coins and tokens at the best price and keep slippage to a minimum, 1inch supports splitting orders across different DEXs when it is beneficial.
How does 1inch work and why is it one of the best-decentralized exchanges (DEX) in 2021
Like most decentralized platforms, users must first link their wallets to the platform. This can be a MetaMask or MyEtherWallet, for example. Then you can pass on a pair. For example, suppose you want to buy TRON with Ethereum, the pair is TRON / ETH. 1inch then shows you where to trade this pair for the best price. For example, it shows platforms such as Bancor, Oasis, UniSwap, and PancakeSwap. You can then also choose to disable some options if you don’t want to use them anyway.
Users then see whether it would be beneficial to distribute the order across different platforms. If this is not the case, the platform will also indicate this. 1inch then indicates which platform is preferred when it comes to price. In this way, you buy or sell your coins or tokens for the best price.
Searching for the optimal exchange rate is of little use for small amounts. It is especially when you need more liquidity that 1inch becomes one of the best. And that is especially the case when you want to trade the somewhat unusual coins and tokens.
1inch costs and fees
You do not pay any transaction costs when you use 1inch. Of course, you pay transaction costs when you make a purchase on another exchange. The amount of this depends on the exchange you choose.
Sushi Swap is a cryptocurrency exchange where you can trade different tokens and coins. It is an AMM (Automated Market Maker). It currently runs on the Ethereum blockchain, so it supports ERC20 tokens, just like Uniswap. The company’s official core team does not control or run this site. The platform is mainly controlled by the users, through voting.
Actually, this is kind of an expanded version of Uniswap launched in this year 2020. It is an evolution of the Uniswap protocol design. On the main Uniswap version, the creators of Sushiswap have added additional features to provide additional benefits for traders and investors.
How does SushiSwap work and why is it one of the best-decentralized exchanges (DEX) in 2021
At SushiSwap you have liquidity providers who contribute liquidity to the pool, earning rewards. This is not only in the form of transaction fees but also in the form of SUSHI tokens. Additionally, you can earn so-called protocol commissions on these tokens, allowing you to make money without even providing additional liquidity to the Sushi Pool.
Lenders with Uniswap LP tokens can wager their tokens and earn SUSHI tokens. At this point, they can also get rewards and earn coins. One hundred SUSHI tokens will be created for each block. These tokens will be distributed among the users in the pool.
The security of the Sushiswap exchange is quite good: it is safe for users. They also ask some companies to check their security. They do this by having a penetration test (pentest) performed on the platform at different times. In this way, they want to be able to provide users with the best security measures.
Sushi Swap has an added feature of migrating tokens staked for liquidity in this platform. These tokens are migrated to Sushiswap contracts. The purpose of this migration is to create a new pool of liquidity for the token holders. Both investors and token holders benefit as investors will continue to receive rewards in the form of SUSHI tokens.
Sushi swap costs and fees
The costs charged by Sushiswap for providing the trading and conversion facility are 0.3% of the total transaction value. Liquidity providers are charged 0.25% of this trading fee. The remaining 0.05% will be paid to the Sushi pool for sushi token holders.
Launched in September 2020, PancakeSwap is a decentralized exchange based on the Binance Smart Chain (BSC), similar to SushiSwap on the Ethereum blockchain. It allows users to trade BEP-20 tokens efficiently and securely through an Automated Market Maker (AMM) model, which allows trading tokens directly within the protocol through liquidity pools. The PancakeSwap token is called CAKE.
PancakeSwap also wants to offer a cheaper and faster solution for decentralized exchanges, making it attractive to use PancakeSwap at a time when the transaction costs on the Ethereum network are very high. Some of the many features include the ability to farm, your tokens to strike, and agreed to vote for the future of the network.
How does PancakeSwap work and why is it one of the best-decentralized exchanges (DEX) in 2021
The operation of the PancakeSwap project is directly inspired by that of SushiSwap and Uniswap. So the principle is exactly the same. It is a DEX that will use an AMM. Simply put, an SMP is a kind of decentralized exchange protocol for decentralized exchanges. It is based on a mathematical formula and the goal is to value assets (coins or tokens) as accurately as possible in price. To arrive at this price, a pricing algorithm that varies by protocol must be used. That is why there is a very specific PancakeSwap protocol.
What is the purpose of the PancakeSwap exchange platform?
Unlike other projects, you will never come into contact with other users to exchange CAKE tokens. And this is one of the uniqueness of this project. You will be able to exchange tokens between them instantly thanks to the funds placed in the exchange platform’s liquidity funds.
To keep it simple: when you deposit tokens in a pool, you will receive one or more LP tokens in return. After that, you will be able to exchange the LP tokens for liquidity (without transaction costs, of course). So you have two different options: exchange BEP-20 tokens with each other, and provide liquidity in order to generate passive income. You also help the network, because you ensure that users can buy and sell tokens and coins for the best price.
PancakeSwap Fees and Charges
When you make a transaction with PancakeSwap, you will have to pay a transaction fee of 0.2%. It doesn’t matter whether you are the buyer or seller. The costs are therefore much lower than on other exchanges, such as Uniswap or Sushiswap. This is partly because PancakeSwap uses BSC. This blockchain is used much less, which means that the costs are also much lower. After all, there is less utilization of the total capacity that the blockchain can offer.
You can choose from many different decentralized crypto exchanges. And that choice is becoming increasingly difficult because more and more new crypto exchanges are added. This makes it even more important that you make the right choice. Because if you choose the wrong crypto exchange, you could just pay far too much for the transactions you do without realizing it.
In this list, we indicated what the most popular and the best DEX crypto exchanges of 2021 are: Uniswap, SushiSwap, PancakeSwap, and 1inch. If you want to know where you can trade your coins and tokens for the best liquidity and price, it is best to use 1inch. This website clearly indicates this.
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