Financial projects involving cryptocurrencies are sprouting 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 generate profits.
How does DEX differ from regular trading platforms? Decentralized platforms are online trading venues built on highly secure blockchains. They facilitate direct trading without intermediaries, utilizing smart contracts to automate processes.
There are several types of DEX:
- Market makers, also known as AMMs (Automated Market Makers), are the most common. They employ algorithms to determine the prices of digital assets online. Unlike traditional exchanges, there is no order book.
- On-chain order books record all cryptocurrencies in a 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 users’ wallets.
- Off-chain order books usually avoid blockchains and employ centralized mechanisms to process transactions instead. On-chain settlements with crypto assets occur when orders are recorded in the order book.
In addition, there are DEX aggregators. These platforms enhance liquidity, making trading more efficient and diverse. They gather data from various cryptocurrency exchanges, providing information about offerings on those exchanges. The advantage is that traders can quickly find suitable options for trading, saving time.
dYdX: This decentralized platform offers a wide range of margin and perpetual trading tools. The platform is built on an Ethereum-based Layer 2 solution called StarkEx. The platform plans to migrate all operations to its blockchain within the Cosmos ecosystem, aiming to improve speed.
Zero-knowledge technology is utilized here, ensuring decentralization, anonymity, and security. The platform stands out for its user-friendly interface, fast performance, and wide selection of standard trading orders.
However, the platform has its downsides. Margin trading has a limited choice of pairs, and there needs to be more variety in swaps.
Wixpool: A decentralized aggregator that combines multiple DEX to create overall liquidity. It employs its liquidity mining protocol using the Wixpool Rate Stabilizer (WRS) algorithm. This protocol pools users’ assets into a common ecosystem, allowing investment in high-yield liquidity pools, resulting in substantial rewards for users.
The aggregator works with 300 DEX projects, pooling users’ assets into liquidity pools. Users receive rewards for each exchange operation conducted within the pools. The process operates as follows:
- Users provide tokens to the protocol.
- The system pools these tokens together.
- The pool is offered to exchanges for trading.
- Exchanges pay a fee for each trade.
- A portion of the fee is rewarded to the user.
Rewards are paid out daily in real-time and can be withdrawn and used as desired. This keeps your capital constantly working, providing passive annual passive earnings from 180%.
Uniswap: This decentralized platform ranks among the largest in the industry. It was initially developed on the Ethereum blockchain but later migrated to an L2 solution. The platform utilizes two smart contracts: one for cryptocurrency exchange and the other for adding new tokens.
Trading occurs with coins based on the ERC-20 standard, and users can independently list tokens on the platform. Additionally, there’s the native UNI token, enabling user-owners to participate in project development.
The advantages of the exchange are high liquidity, easy listing, and a user-friendly interface. However, gas fees and scam projects are present, although the latter are rare.