Are you looking for much safer and secure cryptocurrency exchanges because you are afraid of your cryptocurrencies being stolen on centralized exchanges?
If your answer is YES (!), then I think we have the same concerns. And that is why this article came to be: we want to see what are the best decentralized exchanges in the market right now. Actually, not only that but we want to see which one is actually THE best decentralized exchange out there.
So let’s get going.
First, a bit about the necessity of decentralized trading places and the negative impacet centralized, non-transparent exchanges have on the whole industry.
Centralized exchanges are easy to use, easy to access and they provide advanced trading functionalities, but they are not the best in terms of safety when used. Moreover, hacks are not an uncommon event in the cryptocurrency scene and incidences such as Mt. Gox hack and Bitfinex hack are not news anymore as most of us know about it.
Although centralized exchanges fundamentally violate the basic tenants of a decentralized crypto economy, we are actually forced to use them because we don’t have another option as the decentralized cryptocurrency infrastructure and decentralized exchanges are still being built.
But when it is ready in a full-fledged manner it will be breath a new life itself into the crypto-sphere because decentralized exchanges do not require 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 purchase or sell your coins.
That’s the reason why we start looking around and find out which are the best decentralized exchanges currently available in the market.
Top 6 Best Decentralized Cryptocurrency Exchanges
AirSwap is a New York and Hong Kong-based decentralized cryptocurrency exchange designed from the ground-up with privacy and security in mind. This new token exchange project is built on Ethereum and aims to provide customers with global, peer-to-peer trading with no intermediaries and zero trading fees (!).
Utilizing the so-called “Swap protocol,” AirSwap focuses on doing ERC20 trades.
AirSwap unveiled a new data aggregator product back in summer 2019, a move that shows the firm is looking to stand out in the market decentralized exchanges.
The new product, dubbed DexIndex, provides an overview of how different ERC20 tokens are trading across a number of decentralized exchanges, including AirSwap’s market. The tool could be useful for a number of participants across the Ethereum ecosystem.
The exchange is hosted on the Ethereum blockchain architecture in the form of two smart contracts, a “Factory” contract and “Exchange” contract. The “Factory” smart contract contains an exchange registry, and a method to deploy an “Exchange” contract for a particular ERC20 token.
Thanks to this, any valid ERC20 token can be exchanged on Uniswap via their own 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 want 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 is able to always provide liquidity, no matter how large the order size nor how tiny the liquidity pool; the trick is that the price of the coin asymptotically increases as the desired quantity increases. 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 more difficult and allows for a more stable price situation overall.
The chain is being built on top of Cosmos’ Tendermint protocol; more precisely, Binance forked the protocol and removed some of its elements (smart contracts for example) to create a scalable product that will be able to achieve high transaction throughputs required by Binance standards.
Binance’s new native chain will rely on modified Tendermint PoS algorithm which will basically 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. Total number of validators won’t go up much higher when the mainnet ultimately goes live.
Not much is known about Binance DEX account creation model, but you likely won’t be required to go through the tedium of KYC/AML registrations to trade the stablecoin-like assets on the platform.
This might change if you, for example, decide to turn your Binance Chain-launched BTC stablecoin into real BTC. 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 Binance chain that acts as a proxy for the actual BTC, ETH or other You get your real „physical“ coins when you withdraw them to your own wallet.
And while this means that Binance DEX won’t actually offer non-custodial storage, it does suggest that you’ll have a certain safety net in terms of your private keys. If you 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 alot of control over your funds into the hands of a third party, which is the complete opposite of what a proper DEX should do.
Bancor is supposed to be used in international trade as a unit of account within a multilateral clearing system. It is a so called “market maker” dapp which allows its users to purchase or sell smart tokens at prices that match those found on major exchanges.
While this service is similar to traditional exchanging, Bancor doesn’t match sellers and buyers; Instead, it allows users to purchase or sell BNT tokens which creates a built in smart contract based liquidity mechanism. With a Bancor Wallet which lets users purchase ETH with debit/credit card the platform is important for providing liquidity to 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 cryptocurrency trading platform and trading tool that that provides decentralized solutions for the crypto market. OpenLedger was founded in 2015 with the goal of solving problems like speed, security, stability, and transparency in the cryptocurrency ecosystem.
They have a decentralized exchanged known as OpenLedger Dex, which is designed for high-speed transactions. Also, OpenLedger Dex is leveraging BitShare’s graphene technology to cater its services.
At the time of writing, the volume on this exchange is 320 BTC. In my opinion, this is decent for a decentralized cryptocurrency exchange with 125 cryptocurrencies/crypto assets pairs listed on it.
It’s quite easy to open an account on OpenLedger because it doesn’t require any registration or KYC to start with. Your login password and username are the only things that you need to take care because that is the only thing that can help you in case something goes wrong.
Founded in 2016, Waves Dex or Waves decentralized exchange is the product of Waves cryptocurrency and blockchain. Waves is based in Moscow and led by founder and CEO Sasha Ivanov. To date, Waves has attracted several major startups and businesses – including Tokenomica, ZrCoin and Upcoin.
Waves Dex provides you the best of both the centralized and decentralized worlds by providing you control of your funds on the blockchain and accelerating the exchange process by using a centralized matching service.
WavesDex is a decentralized exchanged built on the Waves blockchain that allows anyone to launch their own digital token in less than one minute, and then trade that digital token for fiat currencies and crypto-assets. It’s important to note that you will need to buy some WAVES tokens in order to create custom tokens on the Waves platform.
At the time of writing, the volume on this exchange is 172 BTC. In my opinion, this is decent for a decentralized cryptocurrency exchange with 72 cryptocurrencies/crypto assets listed on it.
Important Note: When you register on Waves Dex don’t ever forget to keep your back phrase in a safe place where you keep your important documents. The reason for that is that this phrase is the only thing that will help you restore your funds.
Read our comprehensive guide on best cryptocurrency exchanges.
Bitsquare has an open source P2P system that allows anyone to sell Bitcoin in exchange for fiat currency (USD, EUR or Yen), and alternative cryptos. Bitsquare was founded by Manfred Karrer, and was rebranded to Bisq due to copyright issues.
It is a fully decentralized exchange that is available on Windows, Linux, and Mac platforms, but trade volumes are low.
It’s important to note that you are not required to provide sensitive information over the internet in order to get verified with Bitsquare (no name, email ID or verification).
To be a truly anonymous P2P network, Bisq uses Tor to effectively hide the user’s identity and also doesn’t hold Bitcoins or fiat currency on their servers or in their account. Another great thing about this exchange is that every aspect is decentralized from placing the order, to matching the order, to executing it.
Check this Bitsquare’s introductory video:
CryptoBridge is a new entry in the decentralized crypto exchange markets and the crypto world is feeling positive about this exchange. CryptoBridge is a decentralized exchange that offers their own coin called BCO (Bridgecoin). It’s important to note that you save a considerable amount of money in the trading fees when you use BCO to trade on their exchange.
This platform runs on top of the BitShares Network and supports decentralized trading on all popular altcoin pairs without a single point of failure. You – and only you – hold the private keys to your funds, which means that only you have access to them.
However, this site has some USPs that makes it different than other decentralized exchanges such as:
- They offer their own coin called BCO (Bridgecoin).
- It allows BCO token staking and 50% of all trading profits on CryptoBridge will go To BridgeCoin stakers.
- Due to its federated servers, it has no single point of failures.
At the time of writing, the volume on this exchange is 32 BTC. In my opinion, this is decent for a decentralized exchange with 21 cryptocurrencies/crypto assets pairs listed on it.
The login process is quite simple. You just need to select a unique username and a cryptographic password will be generated automatically. You need to note down the password and keep it in a safe place where you keep all your documents.
Stellar is a popular cryptocurrency and blockchain project. However, they have also come up with its native decentralized exchange, which has 6 cryptocurrencies/crypto assets pairs listed on it.
To get started on using the Stellar network, you must first create a key pair, which consists of two parts:
- Public key:The public key, also known as an account, is used to identify the account and for receiving funds.
- Secret key:This key is used to access your account and make transactions. It’s important to note that anyone with this key will be able to access your funds on the Stellar Dex, so make sure to keep this code safe and secure.
You will be given secret key when you generate the key pairs for Stellar Dex, and when you log in to the Dex using this key you will be shown a public key where you will be required to deposit 20 lumens in order to activate your account and start trading.
At the time of writing, the volume on this exchange is 22 BTC.
Other decentralized exchanges worth mentioning:
IDEX – https://idex.market/
ForkDelta – https://forkdelta.github.io
Etherdelta – https://etherdelta.com
RadarRelay – https://radarrelay.com
Kyber Network – https://kyber.network/
DDEX – https://ddex.io
ERCDex – https://ercdex.com
Dextroid – https://www.dextroid.io/
Paradex – https://paradex.io/
Bancor – https://www.bancor.network/
Dubiex – https://dubiex.com
Trade Airswap – https://trade.airswap.io/
Oasisdex – https://Oasisdex.com
EasyTrade – https://easytrade.io/
There are some more decentralized exchanges that are currently being developed to provide us with ease of use and the advanced features that we so desire. Among these are:
- Counterparty Exchange
- Bancor liquidity exchange
Through the efforts made in the past and the ones being made now, we can see the overwhelming need for decentralized services that are not operated by a central authority and are thus considered more secure as they do not provide cybercriminals with centralized points of failure that can be easily compromised.
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com