Decentralized exchanges or DEXs enable users to buy and sell cryptos with one another without the need of a middleman. Users connect their crypto wallet to a DEX, select their crypto trading pair of choice, enter the amount they want to trade, and hit swap. These transactions are made possible via smart contracts, which are self-executing agreements written in code on the blockchain.
Here are the 5 best-decentralised exchanges to keep on your watchlist this year:
1. Calyx Network (CLX)
2. Pancake Swap (CAKE)
3. Uniswap (UNI)
4. Sushiswap (SUSHI)
5. Osmosis (OSMO)
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You do not need to sign up to use a decentralised exchange. Traders will instead require a wallet that is compatible with the exchange's network's smart contract. DEXs' financial services are accessible to everyone with a smartphone or an internet connection that can access the blockchain. As each trade will involve a transaction charge, the first step in using DEXs is to pick which network a user wishes to utilise. The next step is to choose a wallet that is compatible with the chosen network and fund it with the network's native crypto.
Calyx Network (CLX)
Calyx Network (CLX) is a community-driven liquidity protocol that enables multi, blockchain crypto trading and the sourcing of liquidity from diverse liquidity sources to facilitate trading and token swaps at the cheapest price.
The Calyx Network will be supported by three pillars: security, transparency, and decentralisation. Smart contracts will underpin the whole ecosystem, with no third parties involved, ensuring that the financial system remains safe, transparent, and verifiable.
Calyx Network (CLX) is about to begin its presale providing a fantastic opportunity for investors to get in early. The project will be a decentralised autonomous organisation meaning that the holders of the token will be able to vote on new cryptos that can be traded.
Pancake Swap (CAKE)
The decentralised exchange PancakeSwap (CAKE) is considerably cheaper than its main rival Uniswap because it is built on the Binance blockchain instead of Ethereum (ETH). Pancake Swap is a fully automated market maker that provides yield farming, IFOs (initial farm offerings) and lotteries for its users.
Pancake Swap (CAKE) is currently trading at $5.39, some 79% down from its all-time high of $43.96 set in April 2021.
Uniswap (UNI) is a decentralised exchange built on the Ethereum (ETH) blockchain that provides a system for automatic liquidity supply.
A key issue with cryptos traded on normal markets that have low volume is the high spreads that are required. This difficulty is solved by Uniswap (UNI), which allows anybody to become a market maker. For large orders, Uniswap (UNI) has a lot of slippages since the price paid goes up as the quantity goes up.
You can currently pick up Uniswap (UNI) for just $8.73. Similarly to $CAKE, it has lost 80% of its value over the last year.
Sushiswap (SUSHI) is a branch of the Sushi blockchain that aims to simulate a regular exchange by allowing users to purchase and sell different cryptos.
Cryptos exchanged on Sushiswap are kept through smart contracts, rather than by a single central body, and users lock crypto on the programme, which can then be accessed by traders.
$SUSHI is the 126th ranked crypto in terms of market cap but could reach the levels of $UNI and $CAKE.
Osmosis is a proof-of-stake blockchain that acts as the Cosmos ecosystem's automated market maker (AMM) protocol. AMMs are digital asset pools that are administered by a smart contract and used to facilitate decentralised trade. Liquidity pools and smart contracts take the role of order books; liquidity providers deposit their assets in the pool and receive fees when users trade in it.
Osmosis (OSMO) is the second-largest decentralised exchange in terms of market cap behind Uniswap (UNI).
Should You Invest In A DEX?
Decentralised exchanges provide investors with opportunities to invest in cryptos that may not be available on traditional marketplaces. As anyone can list new crypto on A DEX it can be possible to invest in a scam or rug pull. The cryptos mentioned above are working on ways to reduce this from happening. To increase your knowledge of cryptos you may be investing in it is a good idea to read the project's whitepaper and find the community on social media.
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