Financial projects with cryptocurrencies are springing up like mushrooms after the rain. Among the most popular are DEX – decentralized platforms for conducting cryptocurrency operations. We have compiled the best projects where you can confidently invest your money to make a profit.
How is DEX different from regular trading platforms? Decentralized platforms are online trading venues based on highly secure blockchains. They enable direct trading without intermediaries and use smart contracts to automate processes.
There are different types of DEX:
- The most common are market makers, also known as AMMs (Automated Market Makers). They use algorithms to price digital assets online. In contrast to conventional exchanges, there is no order book.
- On-chain order books track all cryptocurrencies in one ledger. Prices are calculated based on the user’s activity in the order book. Data from the order book is recorded on the blockchain, but the cryptocurrencies remain in the users’ wallets.
- Off-chain order books typically avoid blockchains and instead use centralized mechanisms to settle transactions. On-chain settlements with crypto assets occur when orders are recorded in the order book.
In addition, there are DEX aggregators. These platforms increase liquidity and make trading more efficient and diverse. They collect data from various cryptocurrency exchanges and provide information about offers on those exchanges. The advantage is that traders can quickly find suitable options to trade, saving time.
dYdX: This decentralized platform offers a wide range of margin and perpetual trading tools. The platform is based on an Ethereum-based Layer 2 solution called StarkEx. The platform plans to migrate all operations to its blockchain within the Cosmos ecosystem to improve speed.
Zero-knowledge technology is used to ensure decentralization, anonymity and security. The platform features a user-friendly interface, fast performance and a wide range of standard trading orders.
However, the platform also has disadvantages. When trading on margin, the choice of pairs is limited and there needs to be more variety in swaps.
Wixpool: A decentralized aggregator combining multiple DEX to create aggregate liquidity. It leverages its liquidity mining protocol using the Wixpool Rate Stabilizer (WRS) algorithm. This protocol pools user assets into a shared ecosystem, enabling investment in high-yield pools of liquidity, resulting in significant rewards for users.
The aggregator works with 300 DEX projects and aggregates users’ assets into liquidity pools. Users receive rewards for each exchange operation performed within the pools. The process goes as follows:
- Users provide tokens to the protocol.
- The system bundles these tokens.
- The pool is offered to exchanges for trading.
- Exchanges pay a fee for each trade.
- Part of the fee is credited to the user.
Rewards are paid daily in real time and can be withdrawn and used at will. This keeps your capital constantly functioning and allows for a passive annual passive return of 180%.
Uniswap: This decentralized platform is one of the largest in the industry. It was originally developed on the Ethereum blockchain but later migrated to an L2 solution. The platform uses two smart contracts: one for exchanging cryptocurrencies and one for adding new tokens.
Coins are traded based on the ERC-20 standard and users can list tokens independently on the platform. In addition, there is the native UNI token that allows users and owners to participate in project development.
The advantages of the exchange are high liquidity, easy listing and a user-friendly interface. However, there are gas fees and scam projects, but the latter are rare.
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