A decentralized exchange is a platform built on open blockchains that allows you to freely buy or sell cryptocurrency assets without the involvement of intermediaries
A decentralized exchange is a platform built on open blockchains that allows you to freely buy or sell cryptocurrency assets without the involvement of intermediaries. This type differs from the classic version of the exchange and centralized resource. The main feature is that decisions are made by users, not the platform. The workflow is implemented thanks to automation and the presence of smart contracts.
In addition, DEX, unlike its centralized counterpart and stock exchange type, guarantees each user complete anonymity. Digital asset exchange transactions are carried out thanks to a computer algorithm. The decentralized exchange script includes many elements (website, trading terminal, wallets, liquidity pools, etc.).
The principle of operation of exchanges comes down to organizing automated, completely decentralized work with digital assets. However, a detailed comparison of the platforms may reveal some differences. Developers add innovations to their projects that make the platform stand out among its competitors. The user has the opportunity to choose the option of a decentralized crypto exchange that fully meets the needs of a modern trader.
Types of Decentralized Exchanges
If we compare the functionality and features of price formation, there are three types of decentralized exchanges on the market:
- Automated Market Maker (AMM). The most popular and widespread option. Such decentralized exchanges use an algorithm that determines the cryptocurrency rate in real time. Unlike the classic centralized type, AMM operates without an electronic list.
- DEX based on an on-chain order book. A type of exchange that enters each trade into an order book. The rate of a cryptocurrency asset affects the activity of buyers and sellers. Information from the electronic list is entered into the blockchain. The user’s assets are saved in the wallet.
- DEX with off-chain order book. The bottom line is to move away from blockchain. After entering the operation into the order book, the system performs on-chain settlements with cryptocurrency assets.
Traders have the option of DEX aggregators. This type of platform can increase liquidity and enhance users’ trading operations by collecting real-time data from various decentralized exchanges. The trader receives information about all current offers on the cryptocurrency market. The user quickly selects the best option and saves his own time.
Top decentralized cryptocurrency exchanges
Let’s move on to the rating and consider popular options for trading.
DYdX
The first place in the ranking goes to the decentralized exchange dYdX, which provides users with a large selection of instruments that carry out profitable margin and perpetual trading. The exchange does not have a personal node for managing trading operations. Transactions are carried out between users thanks to smart contracts. The platform is managed through its own utility token. Zero knowledge ensures the anonymity and security of the system. Among the advantages, users note: an intuitive interface, high speed, a varied selection of trading orders.
Pancakeswap
The decentralized exchange is in second place in the ranking. The trading platform provides traders with access to asset trading, including perpetual futures contracts. Pancakeswap clone script uses the StarEx scalability mechanism for operations. The exchange provides the user with the opportunity to trade anonymously. Another feature of the platform is the zero gas commission. The advantages of DEX are the presence of a mobile application for iOS and Android, the ability to carry out decentralized trading of perpetual contracts for popular cryptocurrencies.
Uniswap
The largest decentralized exchange with the highest trading volume. The system operates using the base of an automatic market maker. Initially, the exchange ran on Ethereum, but later the platform switched to second-layer solutions. Uniswap operates on the basis of several smart contracts (for exchanging tokens and for adding new tokens to the system). The platform supports ERC-20 standard coins. A special feature is that the client has the right to add cryptocurrency assets to the platform. Its owners of the inactive UNI token, if necessary, decide on the future fate of the project through voting. The advantages are: high liquidity, simple listing rules, convenient and understandable functionality of the platform.
Curve
The decentralized exchange occupies a leading position in terms of the volume of funds blocked in smart contracts and the number of active traders. The trading platform is powered by an automatic market maker, initially launched on the Ethereum network. The exchange allows efficient trading between stablecoins and other tokens of equal value with a minimum commission. Beginners may find the platform too complicated, but a large selection of tools allows you to carry out profitable trading operations between users without the intervention of a third party.
Balancer
Balancer is a decentralized platform that allows you to trade cryptocurrency, as well as make a profit on liquidity supplies and investment portfolio assets. The decentralized exchange operates on the Ethereum blockchain. The user can find out the current cryptocurrency rates thanks to the automated system used on the platform. Balancer is a resource that combines a trading exchange and an investment fund. The decentralized cryptocurrency exchange Balancer has a native token BAL, the assets of which allow users to participate in the management of the platform.
How to create a crypto exchange script?
A popular option if you need to create an exchanger that meets the necessary requirements, the optimal solution would be to develop software in a development company. The finished product will be a unique project, the functionality of which depends on the quality of the performing company.
The second option is to buy ready-made software. The developer will perform the installation, save the settings, and conduct the necessary testing. The easiest way is to buy a ready-made site and rebrand it.
Another way is to adapt the finished product to a specific brand. A crypto exchange on a standard basis is considered a temporary alternative or additional service for the user. The main activity of the client is considered to be a product not related to cryptocurrency, but with a related topic.
Development of a crypto exchange script within the company. This approach saves money and time on creating software. The bottom line is installation, configuration and testing. Compared to a ready-made product, customization in white label solutions has greater capabilities, resulting in the creation of a product that has advantages over competitors.
