How to choose the best decentralized exchange when trading tokens?
Some basic things you MUST know before exchanging EOS tokens
When you are about to trade one token for another, make sure you know how much you are leaving at the table. The difference between the ASK price and the BID price plus the embedded FEES that the exchange is charging is called the SPREAD. In this article, we will compare spreads of the current leading decentralized exchanges on EOS.
The spread is always relative to the quantity. The more tokens you are buying, the higher the price you will have to pay for completing your order on the spot, and the other way around when selling tokens.
To Illustrate our analysis on the different spreads on the EOS Market, we took into account the most popular and liquid EOS exchanges available: DEXEOS, NEWDEX, BANCOR, and of course, YOLO. In order to get a better picture of the different spreads when increasing liquidity, we attempted to trade 1 EOS, 10 EOS, and 100 EOS worth of some of the most traded tokens: KARMA, EMANATE, EVERIPEDIA, CHINTAI, PAYTOMAT, and top EOS StableCoins like EOSDT and CUSD. We also tried other popular EOS exchanges, like WhaleEX, but after realizing that the spread for a few EOS worth of the token goes above 50%, we dropped other exchanges and focused only on the 4 mentioned in this article.
At present in YOLO, we are able to offer 0% fees* & minimal spreads, with a much lower inventory. This makes it easier not only on the project to manage their liquidity, but also on the end user that is buying / selling EOS Tokens without paying a steep price for that particular trade.
* The fact that we charge NO fees now is not a guarantee that YOLO may not charge certain trading fees in the future.
After making our analysis, this is what we found:
In terms of Liquidity and Spread, our analysis suggests that the Exchanges we studied would rank as following:
1 — YOLO
2 —BANCOR
3 — NEWDEX
4 — DEXEOS
Take a look at the following graph:
The source for this graph can be reviewed at this public chart:
What we found was really impressive! The difference between the spread in YOLO and other EOS DEXes ranges from 10% up to 12.5X (1250%)! This means that if you are trying to exchange a large amount of EOS for an EOS token or ViceVersa, you might be paying up to 12+ times what you would be paying in YOLO. In some cases, the spread goes over 100%!!! In other words, you better look out when placing an order…
As it turns out, the spread you will pay in YOLO is much less for most of the listed tokens. Even buying / selling BNT (Bancor Network Token) at YOLO is cheaper than doing it on BANCOR (* for amounts smaller than 100 EOS).
At YOLO, we are trying not only to provide a great user experience when exchanging tokens, but also a fair market price that can give our traders some peace of mind when exchanging their tokens, without the need of going around the web and examine what the different order books look like.
So now you know what the Spread is, go trade safely, trade confidently, and trade on YOLO!
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Thanks for reading (and clapping ;-) ).We are here for all your questions either here in the comments, or in our telegram group.
