Useful Web3 materials — DEXes[2/5]
<p>Today, I will write about a little more advanced topic — DEXes. The term DEX comes from Decentralized exchange and it is the equivalent of a digital marketplace which allows users to trade (swap) cryptocurrencies and other digital assets without a central authority or intermediary.</p> <p>DEXes are build on decentralized blockchain networks, such as Ethereum or Binance Smart Chain and they use smart contracts to automate the trading process. This also means that unlike centralize exchanges which require a third party which facilitates the trade, DEXes are more secure and censorship-resistant. DEXes also allow the users to be in control of their own assets which are traded directly from a user’s wallet without the need to deposit them to the exchange.</p> <p>The algorithms that the DEXes use differ from one another — some rely on automated market makers (AMMs) to set prices based on supply and demand, others use order book-based systems that match buyers and sellers based on their desired prices and quantities.</p> <p>DEXes become more and more popular because of their trustless and decentralized nature. Some of them also offer liquidity pools that allow users to earn from providing liquidity to them.</p> <p>This new exciting technology is here to stay so here is the list of the 5 most popular DEXes at current date:</p> <ol> <li>UniSwap (<strong>UNI</strong>) is a decentralized exchange built on the Ethereum blockchain that uses an automated market maker (AMM) model for liquidity provision and token swaps.</li> <li>PancakeSwap (<strong>CAKE</strong>) is a decentralized exchange on the Binance Smart Chain that allows users to trade cryptocurrencies and tokens using a liquidity provider (LP) model similar to UniSwap. In addition to trading, users can earn CAKE rewards through liquidity provision, staking, and other yield farming activities.</li> <li>SushiSwap (<strong>SUSHI</strong>) is a decentralized exchange and automated market maker protocol that was created as a fork of UniSwap in 2020. It features a governance token called SUSHI, which allows holders to vote on protocol upgrades and other proposals.</li> <li>Balancer (<strong>BAL</strong>) is a decentralized exchange and automated market maker protocol that allows users to create and trade in custom liquidity pools. It uses a smart order routing system to optimize trades and maximize returns for liquidity providers.</li> <li>Curve (<strong>CRV</strong>) is a decentralized exchange that is designed to provide low-slippage trades between stablecoins like USDT, USDC, and DAI. It uses a unique AMM model that is optimized for trading stablecoins and features a governance token called CRV.</li> </ol> <p><em>PS: If you find the topic interesting, you could also check out more information on Automated Market Makers and Liquidity pools.</em></p> <img src="https://medium.com/_/stat?event=post.clientViewed&referrerSource=full_rss&postId=c71d3e7ddb9e" width="1" height="1" alt="">