The main problem with centralized exchanges is that they are run by a central authority – a company that controls your funds and data like a traditional bank. In addition, centralized exchanges use the order book model that you would see on traditional securities exchanges, with a list of buy and sell orders.
The Exchange acts as a custodian, holding assets as a market maker and finding those who wish to sell the assets to buyers. Asset custody, asset listing, liquidity, headquarters, board of directors and centralized trading execution are qualities of a centralized Exchange.
In decentralized trading, you just need to plug in your wallet, like MetaMask , and you're ready to trade directly from it. This makes trading private and fast, and you don't have to go through the tedious process of setting up a bank account and trading, which infringes on your privacy with intrusive and insecure Know Your Customer (KYC) searches like your identity verification, home address, income and more.
In this article, we will discuss:
What are the Top 10 Decentralized Exchanges (DEX) to use in 2022?
PancakeSwap
PancakeSwap has the funniest vibe of any swap on this list. On the home page, you're packed with options like farming, gambling and lottery amid glitter and pancakes.
The design is cute and quirky, with its logo being what appears to be a live pancake with ears. Many of the pages use the shape that flips seven pancakes perfectly on a plate, perhaps giving you a metaphor for a perfect switch. It definitely makes you feel more comfortable with your design.
While the $10 million DEX received from Binance to start might put decentralization purists on edge, the developers of PancakeSwap are also all anonymous, which might make you suspicious or give you Satoshi flashbacks. In any case, it is audited by Certik, so the protocol has been verified by a third party. PancakeSwap also operates on liquidity pool protocols similar to other swap exchanges.
With PancakeSwap V2 having the success the creators envisioned, PancakeSwap should continue to appeal to those looking for a great exchange in the background.
Uniswap
When it was released in 2018, the Uniswap it was revolutionary. The fact that you can exchange Ethereum-based ERC20 tokens on blockchain Ethereum without an order book was a feat. Instead, Uniswap made use of smart contracts that allow users to trade with each other without intermediaries, making it decentralized and peer-to-peer.
Uniswap used innovative liquidity pools to generate the assets needed for swaps to occur. Users like you can add currency pairs like ETH / DAI for example to add to the pool. In return, users receive a small percentage when assets from that pool are used. The price is determined by how much of the asset is left in the liquidity pool.
Uniswap's interface is one of the best things about the platform. You can quickly link Uniswap to your MetaMask and start exchanging tokens. It's simple, effective and, perhaps more importantly for some crypto enthusiasts, decentralized. Uniswap is still, after all this time, at the forefront of decentralized finance.
The overall goal of Uniswap is to get users like you to handle the governance of the exchange. This means that users will help the future of the exchange by voting if they have wagered any of the Uniswap tokens. When it comes to decentralized switches, you can't go wrong with DEX, which brought decentralized switches to the forefront. Since then, many exchanges have directly copied the Uniswap model because of its success and open source.
Uniswap V3 was also recently released, improving Uniswap's capital, execution and infrastructure efficiency. The Uniswap protocol continues to evolve, so while other protocols with a similar interface have challenged Uniswap, the Uniswap team has managed to keep their platform up to date for users.
MDEX extension
Although gas rates on the Ethereum blockchain are going down soon, MDEX managed to eclipse Uniswap in market cap volume when you factor in the market cap volumes of MDEX and MDEX (BSC). MDEX is not ashamed to declare itself as 'the biggest DeFi ecosystem'. As it has only existed since January 2021, with the MDEX (BSC) coming out only in April 2021, the MDEX has already become, arguably, the largest decentralized exchange in the world. Both blockchains have over $1 billion in market capitalization.
MDEX could have been first on this list, as its success in such a short space of time was immense, but the nod goes to Uniswap for being so influential and yet so relevant in space. Users may be uncomfortable that MDEX was created by Huobi, a centralized entity, while Uniswap was created as a decentralized entity, without ICO, from the beginning.
The MDEX homepage has the feel of a centralized exchange, with graphics and numbers thrown at you. This is not a bad thing as it gives the user dynamic engagement. Perhaps if you feel more comfortable with the numbers being shown to you right away, instead of Uniswap's silent interface, you would be comfortable with that. The swap feature is also as intuitive as Uniswap, with options like pooling, liquidity and trading at the top.
Generally speaking, MDEX should be on your radar for decentralized exchanges. Its ease of use and what it offers users has generated unprecedented growth for any decentralized exchange.
Sushi Swap
SushiSwap is first on the list of decentralized exchanges with culinary themes. If you love sushi instead of unicorns, this may be more pleasing to your senses. Anyway, SushiSwap has a lot in common with Uniswap as it is a fork of Uniswap.
It didn't end up being just a fluffy sushi themed fork. Controversially, SushiSwap has launched a 'Vampire Attack' on Uniswap, draining its liquidity by offering those who have migrated huge rewards and incentives to change. In a matter of two weeks, more than $1 billion in cryptocurrencies was embezzled. In another controversy, the anonymous founder also took $14 million, which he regretted and put back.
Despite all that, SushiSwap remains one of the leading decentralized exchanges. The distribution of rewards, or the interest that stakeholders make by contributing to the liquidity pool, is adjusted so that those with smaller stakes are also well compensated, not just those with extremely large stakes. There are also fun sushi-themed rewards.
The trading interface looks much more modern than Uniswap's and is just as easy to trade. Just like a copy of Uniswap V2, you can find all the different options at the top, from pools, yields and analytics. If you ignore the controversies and are interested in wagering rewards, SushiSwap is a great off-center exchange to use.
Burger Swap
Like Uniswap and its food counterpart SushiSwap, BurgerSwap also offers exchange and a percentage yield from liquidity pools. What sets BurgerSwap apart are the rewards it offers for participating in governance. This means that if you are an active participant in voting for where the protocol will go in the future, you will be rewarded with BURGERs (not literal hamburgers) by BurgerSwap. One of the main selling points is its “democratized” platform. Furthermore, the fact that it is on Binance Smart Chain (BSC) and not on the Ethereum blockchain means that BurgerSwap will hold Bitcoin, ETH, BCH and XRP as BEP-20 tokens.
While it doesn't look as modern as SushiSwap, Burgerswap is just as pleasing to look at as Uniswap. Naturally it comes in dark mode and the options on the left are clearly shown, swap, liquidity, governance. Social events are also provided in an organized manner. If you're looking for cryptocurrency options outside of the Ethereum blockchain and a bag that puts a lot of emphasis on governance, BurgerSwap could be the culinary DEX of choice.
JustSwap
JustSwap is powered by the blockchain TRON and uses TRC-20 tokens to make DeFi exchanges. You can exchange TRC-20 tokens for other token pairs on the TRON blockchain.
Like its unicorn cousin and its culinary counterparts, JustSwap simplifies token exchange. However, unlike other apps, JustSwap is not as feature-rich. Because the protocol is new, it doesn't have the stakeout or reward features like some of the other decentralized applications. JustSwap is still the main exchange you can use your TRC-20 tokens with, which for some people is a convenient option. The TRON blockchain, for now, is faster and cheaper than the Ethereum blockchain, making trading much more convenient for many.
So, if you have a lot of currencies on the TRC-20 network or just want to see what it's like to trade on a platform that isn't Ethereum based, JustSwap might have what you're looking for.
BISQ
Bisq prides itself on being an autonomous decentralized organization (DAO). A decentralized autonomous organization works with computerized rules. These rules are not administered by a company with a board of directors or a non-profit organization, as even non-profit organizations are a centralized entity. Bisq is just software and the rules are governed by software.
The platform allows you to buy bitcoin (BTC), Litecoin (LTC), ether (ETH) with all types of fiat like Australian Dollar (AUD), United States Dollar (USD), Euro (EU) and more. Bisq doesn't command the wealth that other decentralized exchanges here command, but it makes this list for being able to trade Bitcoin and other altcoins with fiat privately and securely that reinforces the values of decentralization.
While it's quite easy to use and the design is very clean, it can be a little harder to get used to. For one thing, you really need to download the program. It doesn't just show up in your browser with a search. But after that, it's not hard to get started right away. Bisq offers a ton of videos for you to learn if you get stuck.
If this were a list of how to maintain the values of decentralization, privacy and reliability, Bisq would be at the top of the list. Certainly, it's something to consider if you want to trade Bitcoin while keeping the spirit of decentralization in mind.
OpenOcean
OpenOcean is on this list as a DEX aggregator. It compiles several decentralized exchanges, even those that are on this list, like SushiSwap and Uniswap, and tries to offer the best price on your chosen encryption from many decentralized apps. They managed to win over customers with their 'no extra fees' policy, not charging protocol fees and even protecting users should asset prices rise or fall. The PRO version allows for the usual trading tools like candlestick charts, profit and loss settings, limit orders and much more.
If you have a specific token you're looking for and want to see which decentralized bag is offering the best deal, the Open Ocean platform could be your choice. If you're looking for pure decentralized trading, however, OpenOcean's centralized trading aggregation might not suit you.
HoneySwap
Honeyswap is like Uniswap, except for the restructuring around xDai trading pairs. With almost no decentralized exchange offering xDai, this might be what you're looking for if you've developed a taste for stablecoin. The exchange offers revenue production, a way to transfer ERC-20 tokens to the xDai network, and allows you to exchange your fiat for xDai.
Honeyswap doesn't want to stop being just a Uniswap clone. You want, if not already, a large part of the decentralized financial ecosystem.
1inch Exchange
1inch Exchange is the other DEX aggregator on this list. DEX uses liquidity protocols that facilitate trading and bases its protocol on algorithms. If you're worried that an Oasis coin might be priced lower than a Uniswap, you can alleviate your worry with a 1-inch DEX aggregator. The platform also operates on the Ethereum and Binance Smart Chain, allowing you to diversify your trading options.
With the governance token just released in December 2020, 1inch seems to make waves as part of the DeFi ecosystem.
Conclusion
The entire decentralized exchange space is still new, there is a complete list of decentralized exchanges that you can try out, as many of them are open source, making users trust the peer-to-peer protocols, they can be examined and modified by minds innovative. With so many projects being launched and so many people believing in decentralization, we may be living in a decentralized financial world sooner than some think.
