Every crypto enthusiast understands that at present, the future lies with DeFi technologies, namely behind such a phenomenon as decentralized exchanges. Such platforms open up many unique opportunities for clients to earn money. Investors can easily lend, stake, borrow and profit from their virtual assets without considerable effort. Along with such amazing features, all actions are fast, anonymous, and cheap.
Due to the enormous hype of this blockchain sector, it is quite difficult for newcomers to choose the right DEX. There is no single correct option. Each decentralized exchange has its advantages and disadvantages. But, several companies can be considered the best options on the market. Below, you can read a comparison between the top three exchanges: Uniswap, PancakeSwap, 1inch, and decide which is best for you.
Uniswap
Uniswap is considered one of the first DEXs created based on the Ethereum network. This platform uses the ERC-20 smart contract system, supporting its stable operation. In addition, the company uses the Constant Product Market Maker technology, with the help of which liquidity providers can remove or add liquidity.
Since the product is built on Ethereum, liquidity providers must deposit ETH as well as ERC-20 tokens such as COMP, AAVE, and so on. The investment ratio should always be 50/50. Crypto enthusiasts seeking to transact through an exchange must pay a 0.3% commission. The system divides swapping fees among the members in the liquidity pool. Over 5,500 tokens available on the site can be used for trading.
The DEX is extremely easy to use. There is no KYC verification here. People do not need to waste time providing an ID or a driving license. The swapping process is as simple as connecting a crypto wallet to the platform. Clients should select two types of tokens, enter the amount, and click OK. Complete decentralization allows projects to run directly on Uniswap. In this way, investors can quickly access a variety of tokens.
But there is the issue of reliability. Scammers can add fake coins to the platform. Inexperienced crypto investors may believe in such projects and start buying up their tokens, which are worth nothing. Company officials are working on a solution to this problem.
PancakeSwap
This DEX is similar to the previous one, as it offers customers the same range of services. PancakeSwap, unlike Uniswap, does not use Ethereum blockchain technology but the Binance Smart Chain. This allows trading BEP-20 coins and dApps directly. The names of the founders of this platform are still unknown, but thanks to the CAKE token, the community is involved in the decision-making process. The 24-hour trading volume is $13 million.
One of the most significant advantages of this DEX, compared to Uniswap, is the level of fees. Customers must pay 0.2% of the amount for each transaction on the site. Besides, there are also no commissions for withdrawing assets from the account. The low fees became the reason for the company’s rapid growth against the backdrop of a sharp increase in GAS (an estimated fee for a successful transaction) in the Ethereum blockchain.
There are slightly fewer tokens available here, only 290, but the site is straightforward to use. The interface is made in a minimalist design. Connecting a wallet to the platform and choosing trading pairs is elementary. Customers may have problems swapping ERC-20 coins for BEP-20 tokens, but after reading the instructions for using Binance Bridge on the site, everything becomes clear.
1inch
The platform is somewhat different from the previous two because it is not a classic DEX but an aggregator. Its task is to find the most profitable solution for customers. This procedure occurs due to rerouting trades via the exchanges with the best conditions. Below, you can read some of the main features of the platform.
- Offers from over 50 liquidity sources on Ethereum, 20 on Binance Smart Chain, and 8+ on Polygon.
- There are no deposit, exchange, or withdrawal fees.
- Easy-to-use interface.
Despite the many benefits, certain disadvantages are associated with choosing a DEX. It can be challenging for newcomers to pick the right DeFi platform, but crypto enthusiasts will not have any problems after some time.
