The Six Best Crypto Decentralized Exchanges (DEXs) In 2024

Decentralized exchanges (DEXs) offer the ability to swap crypto tokens without trusting a middleman, like the administrators of a conventional centralized exchange. However, not all DEXs are equal. Here’s how you can evaluate them and identify the best DEX for your purposes.

Introduction

Ever since the launch of the very first crypto exchange, Mt Gox, in 2010, trading platforms have proven to be a weak link in the blockchain ecosystem. Centralized Exchanges (CEXs) are vulnerable to hacks and fraud, including insider exit scams. Even today, 14 years later, CEXs are still causing problems for crypto traders. For example, in March, Coinbase experienced downtime on several occasions, preventing traders from accessing the markets at periods of peak volatility.

Decentralized exchanges (DEXs) are the answer to the inherent flaws in CEXs. They offer a way for users to trade tokens on a peer-to-peer basis and cut out the single points of failure that can make CEXs so risky.

But what exactly are decentralized exchanges, how do they work, and how can you select the best crypto DEX for your needs?

Understanding Decentralized Exchanges (DEXes)

Today, Most DEXs are based on automated market makers (AMMs): smart contracts that set the price of crypto tokens based on supply and demand. Anyone can lock tokens in liquidity pools, and users can swap tokens trustlessly against this liquidity. The AMM smart contract sets the exchange rate based on an equation, and liquidity providers earn trading fees.

AMM-based DEXs have almost completely replaced earlier crypto DEXs that attempted to replicate the user experience of centralized exchanges, with traders’ bids and asks stored on-chain in order books. These generally turned out to be inefficient, expensive, and difficult to use.

AMMs offer a simple, intuitive user experience. The trader simply enters the amount of tokens they wish to trade, the crypto they want to swap them for, and they are given a quote for a single price and amount. If they accept it, the trade is conducted trustlessly, with the tokens being released from the smart contract directly into their wallet.

Criteria for Evaluating DEXs

There are now dozens or even hundreds of DEXes, hosted on almost every major blockchain. If you’re looking to trade tokens trustlessly, or earn by providing liquidity to a pool, there are several criteria by which you might want to evaluate the best crypto DEX.

Firstly, there is the chain or chains on which the DEX operates. This will need to be the same chain on which you hold your tokens. Alternatively, you will need a means of bridging funds. Interchain bridges operate on different models with a greater or lesser degree of centralization and security, so this will require careful consideration.

Liquidity is another major criteria, since insufficient liquidity may render your trades inefficient. You could incur slippage or, in simple terms, you will not receive as much money as you should when you swap tokens.

Finally, some DEXs are completely open, while others have a permissioned element. For example, some DEXs will only support certain tokens, and new liquidity pools can only be added by the team. If a given DEX does not support your chosen token, it could be some time (or never) before a pool is added or before it attracts sufficient liquidity to support efficient trading.

6 Best Crypto Decentralized Exchanges (DEXes) in 2024

While DEXes all share some properties, they come in different forms, and have different advantages. Here are six different well-known and popular DEXes.

Uniswap

Uniswap was the first AMM and remains one of the largest and most popular DEXs in the DeFi space. It was launched by Ethereum developer Hayden Adams in December 2018 and later issued its own UNI token as part of its transition to a DAO.

Uniswap supports hundreds of tokens and is very well established and well regarded in the crypto space. Its wide user base means it has deep liquidity, especially for the most popular tokens. By these criteria, it is one of the best DEXs in the crypto space. However, as an Ethereum dApp, users must pay gas fees, and this can make trading prohibitively expensive at times of heavy network use.

1inch

While it’s often fine to use one exchange, there are times when you’ll want to get the best deal on the market. This means checking multiple DEXs to compare liquidity and price. 1inch makes this process easy. It’s an aggregator that scans multiple supported platforms, ensuring that traders can access the very lowest prices.

While 1inch doesn’t charge its own fees, you’ll have to pay the fees (as well as gas) of the underlying DEXsto which it connects. It’s also slightly more complicated than a regular DEX, though this shouldn’t be a major problem.

Curve

One of the major use cases for DEXs is trading between different stablecoins. Curve allows users to do this with a high degree of efficiency. Its algorithm is optimized for stablecoin swaps, making it a better choice for swapping between, say, USDT and USDC, than a regular DEX like Uniswap would be. However, this also means that Curve is specialized for stablecoins and does not support other assets, so it’s not the best DEX for general trading.

PancakeSwap

Pancakeswap is Binance Smart Chain’s leading DEX. It operates like Uniswap and other AMMs. Being hosted on BSC means gas fees are extremely low, and therefore trading small sums is more efficient. As a very popular DEX, many of its pools have excellent liquidity.

Pancakeswap has prioritized its UX, and it is very user-friendly. It is also possible to earn in various different ways.

dYdX

While most DEXs today are AMMs, dYdX is an order book-based exchange. It offers a series of features more familiar to CEXs, such as leveraged trading, lending, and short selling. All of this makes it more versatile than simple AMMs and offers users different ways to earn. Although these features make it more complicated than most other DEXs, it’s relatively user friendly (including a mobile app), has low fees, and is known to have deep liquidity. In short, it’s one of the top decentralized exchanges for breadth of functionality.

Spectrum Finance

Spectrum.Fi is Ergo’s native DEX. It’s a cross-chain platform that serves Ergo and Cardano. As well as trading ERG and other tokens for projects within the Ergo ecosystem, users can trade the SigmaUSD stablecoin. As an AMM, users can earn by depositing tokens in liquidity pools, and there are numerous yield farming opportunities.

Comparing Top DEXs

There are many decentralized exchange platforms, and selecting the best DEX for your needs will depend on the tokens you want to trade, the blockchain on which they are hosted, and other factors (including the size of the trade). In all cases, DEXs should be more secure than their centralized counterparts, although this can come at the expense of the UX. Overall though, the best crypto DEXs are easy and intuitive to use.

Conclusion

The best decentralized crypto exchanges offer a viable alternative to the risks and downsides of using centralized exchanges, providing increased security, better privacy, and (for the top DEXs and most popular tokens) better liquidity and more efficient trade execution. Make sure you research the different platforms available, and familiarize yourself with the different features (as well as pros and cons) before using them.