Users can buy and sell crypto directly through decentralized exchanges, without the need for intermediaries. Low fees, fast transaction speeds, anonymity, and many other benefits are offered by decentralized exchanges (DEXs).
This guide will review the top decentralized exchanges in 2022. It will also explain why investors and traders should consider a DEX when purchasing their next crypto.
What is a Decentralized Crypto Exchange?
A decentralized crypto exchange is a crypto trading platform where traders can trade tokens and buy them from one another. Trades are made directly between traders without the involvement of a middleman. To provide security and ease, the trading process is completely automated.
Decentralized crypto exchanges can be a standalone platform that is governed by a decentralized autonomous organization (DAO), such as Uniswap and PancakeSwap. They can also be part of a P2P trading network within a centralized exchange like OKX, Binance, and Huobi.
How Do Decentralized Bitcoin Exchanges Work?
Decentralized exchanges do not have intermediaries to facilitate trades. They rely instead on automated processes to ensure that buyers receive their tokens and sellers receive their payments.
The seller’s tokens go into an escrow account when a transaction is initiated. This account is secure and the tokens are controlled by the smart contract. Tokens in the account will be transferred to the buyer automatically when the buyer pays. Tokens in the Escrow Account can be returned to the seller if payment is not received.
There are two types: order book and swaps.
Swaps like Uniswap or PancakeSwap are designed to allow traders to swap tokens. They are dependent on liquidity pools that contain pairs, such as USDT/ETH.
A trader can swap USDT for ETH or vice versa using the liquidity pool. The tokens are simply pulled from the liquidity pool after the escrow process. To provide liquidity, users can stake tokens in a liquidity pool. This is usually done to earn interest on their staked tokens.
OKX, Binance, and Huobi allow traders to list tokens that they wish to purchase or sell, along with their prices and the payment methods they are willing to accept. This is where traders buy or sell directly to one another.
Traders have the responsibility to search the order books for trades they are interested in. There are many payment options and coins available for trading.
Benefits of decentralized cryptocurrency exchanges
There are many advantages to decentralized cryptocurrency exchanges over centralized ones.
A decentralized crypto exchange offers many advantages, including a large coin selection. It is easy to list new coins on DEXs, which allows traders and investors access to emerging cryptocurrency quickly. This could be an advantage for traders looking to find the next big cryptocurrency.
Decentralized exchanges don’t usually require identification verification or any other Know Your Customer (KYC), measures. This allows traders to trade crypto on exchanges in complete anonymity.
Decentralized crypto exchanges often have lower trading fees than centralized ones. This is because the exchange doesn’t hold tokens to act as a middleman and there is less work and risk.
DeFi platforms offer cryptocurrency staking. Many of the most popular decentralized exchanges also offer these services. Token holders can use a DEX to stake their tokens in a liquidity pool and earn interest on the crypto.
Also read: Top 10 Crypto Trading Bots in 2022
Review of the Top Decentralized Exchanges
Find out more about the top decentralized exchanges. Let’s take a closer look at the best-decentralized exchanges for crypto investors and traders.
OKX has more than 20,000,000 users worldwide and is considered one of the most popular global crypto exchanges. OKX central exchange allows users to trade more than 340 tokens for a minimal fee of 0.10%.
OKX offers peer-to-peer trading (P2P), which allows users to trade the most popular tokens such as Bitcoin and Ethereum. OKX’s decentralized exchange allows traders to set their own prices and choose from over 900 payment options. It is easy to obtain funds in any currency that a seller needs.
OKX does not charge trading fees for its P2P exchange. Only traders are required to place an advertisement for their trade to help other traders find the items they offer to sell or buy on the DEX.
It is easy to create a decentralized OKX order. You just need to choose a coin and specify the amount you want to sell or buy. The trade will be instantly communicated to OKX traders. You can also follow OKX traders via the decentralized exchange. This is useful if you know of traders who use specific payment methods.
OKX allows you to deposit by bank transfer, credit card, debit card, or bank transfer. The exchange also offers a custodial wallet app that can be used on iOS, Android, as well as web browsers. It is easy to securely store crypto tokens and access OKX’s online P2P exchange at any time to make swaps. A growing number of decentralized apps (dApps) can also be stored in the wallet.
Get started today with OKX, the decentralized exchange that will be the best for 2022!
Binance, another global crypto exchange, offers centralized trading for hundreds of the most valuable cryptocurrencies to trade by 2022. It also offers a P2P trading platform that allows crypto traders to trade directly with one another.
The Binance DEX allows traders to purchase Ethereum BTC, BNB Maker, Tether, and Binance USD. There are over 50 currencies that can be used for payments and many payment options for each currency. Traders from all over the globe can find traders in their area.
Binance’s P2P trading platform is anonymous when buyers pay in cash. This is a big selling point. Buyers and sellers who accept an order listed on the exchange are exempt from paying any fees. Users who create advertisements for buying or sale are subject to a small (variable), transaction fee.
Binance’s P2P platform is also highly secure. All funds are placed into an escrow account during a transaction, so buyers and sellers can’t cancel a deal once money has been sent. This makes the transaction more secure and smoother for both parties.
Uniswap, one of the most important decentralized exchanges on the Ethereum blockchain, is Uniswap. This DEX has processed over $1.2 trillion worth of transactions since its launch in 2018. It has over 300 integrations today and more than 4,400 community delegate members helping to secure its network.
There are many ERC-20 tokens that you can buy or sell on Uniswap. This is partly because it’s easy for new tokens listed on the DEX. To create a new liquidity pool, holders of unique tokens will need to simply add the coin to exchange by funding the equivalent amount of Ethereum. Uniswap hosts many unique crypto tokens that aren’t available elsewhere.
Uniswap charges one of the lowest transaction fees among major decentralized exchanges. Users can also earn interest by staking tokens into a liquidity pool to increase their crypto holdings. This allows for easier trading in the token and provides opportunities for cryptocurrency yield farming.
Uniswap offers a governance token, UNI. UNI holders can vote on open proposals for Uniswap. This helps to reward people who support the exchange and keeps Uniswap competitive.
PancakeSwap, a decentralized crypto exchange, is a great place to find new cryptocurrencies early before they become big. PancakeSwap’s easy listing process and low transaction fees make it the ideal exchange for crypto projects looking to launch their ICO. PancakeSwap lists Battle Infinity and Lucky Block first.
PancakeSwap was built originally on the Binance Smart Chain. This makes it stand out from other competitors like Uniswap or SushiSwap. It recently launched an integration with Ethereum. PancakeSwap now operates on both blockchains so users can access thousands of tokens as well as more liquidity.
PancakeSwap can also be used as a Defi crypto interest exchange. The DEX provides liquidity pools for investors to stake their tokens, as well as yield-farming offers that can earn up to 778% interest. PancakeSwap’s crypto token, CAKE can be staked along with stablecoins such as USDT and BUSD to earn up to 50% in APY.
Also read: Top 10 Crypto Wallets for 2022
Huobi is a global crypto exchange that offers P2P trading for several popular cryptocurrencies. Huobi allows traders to trade Bitcoin, Ethereum, and Litecoin as well as Ripple and EOS.
Huobi’s P2P platform allows you to trade in a variety of currencies and offers up to 59 local payment options. Huobi is a great choice for traders who don’t like paying fees as the vast majority of decentralized trades can be done completely free.
While transactions take place, tokens and payments are kept in escrow accounts. This ensures that both parties are protected automatically. Huobi verifies advertisers using the platform and uses facial recognition software for ensuring that transactions are legitimate. These measures are less private than the best decentralized crypto apps but provide users with greater trust in the system.
Huobi also offers 24/7 customer service. This is a featured trader who won’t normally get when using a DEX. It can be a huge help for new users. Huobi has also created a video explaining the process of trading on the decentralized exchange.
Conclusion — Top Decentralized Crypto Exchanges
Decentralized exchanges allow traders to trade crypto without the need for intermediaries. They have lower trading fees, privacy, a wider selection of coins, and access to yield-generating Defi staking.