If you are looking for the best-decentralized exchanges in the crypto market right now because you are afraid of your cryptocurrencies being stolen on centralized exchanges, this post may help you.
Additionally, we will see which one is THE best-decentralized exchange out there in 2021.
Centralized exchanges are easy to use, easy to access and they offer advanced trading functionalities, but they are not the best in terms of safety and security. In addition, hacks are not an uncommon event in the cryptocurrency scene and incidences like the Mt. Gox hack and Bitfinex hack are not news anymore as most of us know about it.
Although centralized exchanges violate the basic tenants of a decentralized crypto-economy, we must use them because we don’t have another choice as the decentralized cryptocurrency infrastructure and decentralized exchanges are still being built.
But when it is ready in a full-fledged manner then it is going to be breath a new life itself into the crypto-sphere because decentralized exchanges do not need a third party to store your funds, instead, you are always directly in control of your coins and you conduct transactions directly with whoever wants to buy or sell your coins.
That’s the reason why we start looking around and finding out which are the best-decentralized exchanges available in the market.
Top 6 Best Decentralized Cryptocurrency Exchange
AirSwap is a New York and Hong Kong-based decentralized crypto exchange designed from the ground up with privacy and security in mind. This new token exchange project is created on Ethereum and plans to provide customers with global, peer-to-peer trading with no intermediaries and zero trading fees.
AirSwap unveiled a new data aggregator product back in 2019, a move that indicates the platform is looking to stand out in the market decentralized exchanges.
The new product, dubbed DexIndex, provides an outlook of how different ERC20 tokens are trading across several decentralized exchanges, including AirSwap’s market. The tool could be useful for some participants across the Ethereum ecosystem.
This exchange is hosted on the Ethereum blockchain architecture in the form of two smart contracts, a “Factory” contract and an “Exchange” contract. The “Factory” smart contract contains an exchange registry and a way to deploy an “Exchange” contract for a specific ERC20 token.
As a result, any valid ERC20 token can be exchanged on Uniswap via their unique exchange contract. There is exactly one exchange contract per ERC20 token and if a token does not yet have an exchange, one can be created by anyone using the Uniswap factory contract.
Market making isn’t done by specifying the prices you aim to sell/buy for. What happens is that Uniswap makes markets with the help of a deterministic algorithm called Automated Market Maker (AMM).
The algorithm quotes prices to end users according to a pre-defined rule set called “Constant Product Market Maker Model”. This AMM can always provide liquidity, no matter how large the order size or how tiny the liquidity pool is; the trick is that the price of the coin asymptotically rises as the desired quantity rises. While larger orders tend to suffer as a result, the system never has to worry about running out of liquidity.
Uniswap, while not aiming to replace traditional exchanges, brings forth a couple of additional extras that the market might be interested in. In theory, it makes market manipulation harder and allows for a more stable price situation.
The chain is being built on top of Cosmos’ Tendermint protocol; more exactly, Binance forked the protocol and removed some of its elements (smart contracts for example) to create a scalable product that can achieve high transaction throughputs required by Binance standards.
Binance’s new native chain will rely on a modified Tendermint PoS algorithm which will operate as a Delegated Proof of Stake algorithm. The chain (once its testnet goes live in a couple of weeks) will be tested on 11 validating nodes. The total number of validators won’t go up much higher when the main net ultimately goes live.
Not much is known about the Binance DEX account creation model, but you likely won’t be needed to go through the tedium of KYC/AML registrations to trade the stablecoin-like assets on the platform.
This might change if you, for instance, decide to turn your Binance Chain-launched BTC stablecoin into real Bitcoin. If that turns out to be a requirement and if your private key isn’t the only „ID“ you’ll ever need to exchange value on Binance DEX, then all the talk about decentralization goes up in the air.
Essentially, you are issued an IOU, a placeholder token on the Binance chain that acts as a proxy for the actual Bitcoin, Ethereum, or other You get your real „physical“ coins when you withdraw them to your wallet.
And while this means that Binance DEX won’t offer non-custodial storage, it does suggest that you’ll have a safety net in terms of your private keys. If you accidentally lose your private key you won’t lose access to your actual funds, but only to the Binance Chain-issued stablecoins.
This means that you could potentially regain access to your funds even without the private key. This does place lots of control over your funds into the hands of a third party, which is the complete opposite of what a proper DEX should do.
The Balancer is useable in international trade as a unit of account within a multilateral clearing system. It is a so-called “market maker” app that enables its users to buy or sell smart tokens at prices that match those found on major exchanges.
While this service is similar to traditional exchanging, Balancer doesn’t match sellers and buyers; Instead, it enables users to buy or sell BNT tokens which makes a built-in smart contract-based liquidity mechanism. With a Balancer Wallet which lets users buy ETH with a debit/credit card, the platform is important for offering liquidity to the crypto community. The platform offers over 90 active tokens (and plans on adding more) with over 4000 trading pairs.
Based in Denmark, OpenLedger is a crypto trading platform and trading tool that offers decentralized solutions for the crypto market. OpenLedger was founded in 2015 aiming to solve problems such as speed, security, stability, and transparency in the cryptocurrency ecosystem.
They have a decentralized exchange known as OpenLedger Dex, which is designed for high-speed transactions. Also, OpenLedger Dex is leveraging BitShare’s graphene technology to cater to its services.
The volume on this exchange is over 320 BTC. This is decent for decentralized cryptocurrency exchange with 125 cryptocurrencies/crypto assets pairs listed on it.
It’s quite simple to open an account on OpenLedger as it doesn’t need any registration or KYC to start with. Your login password and username are the only things that you have to take care of because that is the only thing that can help you in case something goes wrong.