Top Decentralized Exchange (DEX)Platforms in 2024 — Ultimate Guide for Startups
Decentralized exchanges (DEX) are platforms that enhance peer-to-peer trading for cryptocurrencies without third-party regulation. There has been a significant demand for decentralized platforms in the Crypto market since its introduction and it is deemed as the future. Especially, with the number of exciting features available, Decentralized platforms are gaining a massive audience already.
The primary element acting as the core of decentralized exchanges is smart contracts. Smart contracts play a major role in any automation process in a decentralized platform. They facilitate the execution of the required action when pre-determined conditions are matched. Hence, decentralized platforms do not require an intermediary to regulate transactions between users and are highly secure.
Also, Decentralized applications have now extended their presence to the financial sector. For users who would like to trade or swap Cryptocurrencies without a commission fee, the ideal way would be to approach a DEX platform. Apart from that, DEX platforms enhance the anonymity of users. Before delving deep into more about DEX, here is a simple overview of it.
What are Decentralized Exchange Platforms?
Decentralized exchanges are cryptocurrency-swapping platforms for users who wish to buy, sell, or trade Cryptos without the intervention of a centralized authority. These exchanges are being ultimately developed to provide users with more control of their assets. Additionally, the DEX platform offers the need for trust to users in terms of security. These exchanges can be grouped into two types
- AMM based DEX
- Order book-based DEX
The first type, AMM or Automated Market maker is a protocol system designed to solve the liquidity problem. Here, the trade doesn’t have to take place between two users. Instead, the user trades against a pool of tokens which has many advantages. The users don’t have to wait to match a seller and can process quick transactions regularly. The important thing to note here is the liquidity pool feature which has an algorithm set to determine token price. Whenever a trader provides liquidity to the platform, he gets rewards as tokens. The best example of an AMM-based DEX is Pancakeswap.
The other type, the order book-based system operates quite similarly to the centralized exchanges except for the involvement of smart contracts. The usual process of matching and execution takes place in the DEX order book in an automated way. The order book contains the entire information on the token prices along with graphs and charts to determine the variations. The best example of an order book-based DEX is dYdX.
A new type of DEX, named DEX aggregator has made rounds too. These platforms have different sources of liquidity from various providers and also help to round up the best swap prices for the traders. The best example of a DEX aggregator is Paraswap, a trending platform in the market.
Centralized exchanges vs. Decentralized exchanges — What’s the difference
The involvement of an intermediary is a major difference between Centralized and Decentralized exchanges. While centralized exchanges rely on a central authority to regulate transactions, they have different sources of revenue making. Trade fees, Listing fees, Crypto withdrawal fees, and Margin trading fees are some revenue streams available in a Centralized exchange for the owners.
As far as decentralized platforms are concerned, swap fees and native token distribution are two important revenue streams. Other features like yield farming and staking can also contribute to the revenue of the DEX platform. However, the main purpose of Decentralized exchange development is to create an ecosystem and build a strong brand which can ultimately reflect in the revenue a few years later.
Attractive Features Available in a Decentralized Exchange Platform
Decentralized platforms are quite popular for the features they offer. The unique features available in decentralized platforms makes them one of the standout business in the current Crypto industry. The number of features added to the platform can also multiply the revenue for entrepreneurs. Here are the usual features that come with a DEX platform.
- AMM protocol
- Instant swapping
- Liquidity pool
- Yield farming
- Syrup pools
- Staking
- Multiple wallet compatibility
Apart from these features, entrepreneurs can add their own based on preferences and needs. Many DEX platforms have now developed governance features as well which allow the users to vote on any improvements needed in the future. Additionally, it’s important to know the advantages of a decentralized exchange in particular.
Benefits with Decentralized Exchanges Platforms
Speaking about DEX, the number of users entering the platform is always likely to be high since they offer peer-to-peer transactions. Also, decentralized platforms have significant advantages that may not be possible in a centralized exchange. Here are a few of the benefits offered by DEX.
- Reduced trade fee
- Unlimited token range
- Secured Private storage for tokens
- Highly transparent
- No intermediary involvement
- Passive income through staking
- Anonymity
- Quick accessibility
- Improved authority over Crypto assets
- No KYC Verification needed
I have mentioned only a few advantages of DEX platforms. There are plenty more which show the value of the concept of decentralization. Moving on, take a look at the most popular decentralized protocols in 2024 to get a better idea.
Top Decentralized Exchange Platforms in 2024
As far as top decentralized exchange platforms in 2024, they follow a pipeline and have created a strong user base already. For entrepreneurs looking for DEX business models, these exchanges will be the perfect choice without a doubt. Let’s take a look at it one by one.
PancakeSwap
PancakeSwap is among the top-ranked DEX platforms in 2024 with a staggering trade volume of more than 93,000,000 already. Built on the Binance smart chain network, PancakeSwap offers a variety of interesting features to its users, including Lottery, IFO, Syrup pool, etc. The AMM-based protocol allows users to swap BEP-20 tokens with Cake being the platform’s utility token.
UniSwap
Uniswap is another highly popular DEX platform on the Ethereum blockchain and has grabbed a lot of attention in the Crypto industry. Launched in 2018, Uniswap allows the swapping of ERC-20 tokens and has a trading volume of $320,000,000. Built on AMM protocol, Uniswap offers several options for its users and its native token is UNI.
SushiSwap
Sushiswap was earlier forked from Uniswap but later grew into a separate entity after tremendous growth. The AMM-based protocol was built on Ethereum and came into the industry in 2020. Sushiswap boasts of a trade volume of more than $3,000,000 and has emerged as a tough competitor to Uniswap.
dYdX
dYdX is by far, the top DEX platform in terms of trade volume as the platform has already reached nearly $750,000,000. The Order-book-based protocol runs on the Ethereum blockchain and users in this exchange can trade with zero fee. $DYDX, the native token is needed for users to participate in voting and governance. The exchange has a unique way of revenue-making through the maker-taker fee structure.
Curve
Curve is another DEX platform that is up and running with the popular exchanges and has a trade volume of more than $71,000,000. The platform uses the AMM feature to maintain liquidity and has got very minimum slippage tolerance. Launched in 2021, the exchange runs on multiple chains and is making huge strides.
How Decentralized Exchanges Platform work?
Understanding decentralized exchanges from both user and admin perspectives is crucial. It can be a massive boost for entrepreneurs looking to start an exchange. Let’s start from the user perspective at first.
- The primary factor that comes to mind while entering a decentralized protocol is connecting the wallet. Users cannot access most decentralized platforms without connecting a non-custodial wallet like Metamask, Trust Wallet, etc.
- Once that is completed, the user can check for the swap feature or exchange pairs in the platform.
- The user can choose the ideal pair to swap from the list and set the slippage tolerance accordingly.
- After the completion of the swap function, the assets get transferred to the user’s wallet directly.
As far as the admin is concerned, he/she is responsible for the managerial operations in the DEX platform.
- The admin will have to take care of pair management, add or delete farming pairs, and the swap history.
- Also, the admin will have to take care of additional features like yield farming if included in the platform.
Future of Decentralized Exchanges Platform
Although centralized exchanges lead the race comfortably at the moment, the decentralized platforms aren’t lagging far behind. It will only be a matter of time until they catch up with the centralized platforms. The world is adapting to decentralization progressively and more DEX platforms are expected to come into the ranks. Given the ease and comfortability of DEX, users will surge in those platforms.
The smartest of the traders would have already started building Defi protocols by looking at the scope available in the future. There are plenty of smart options at the moment to build DEX and entrepreneurs can get high profits in a short time.
How to get Started with a DEX platform?
To build a DEX platform, entrepreneurs have two wise options that have instilled a lot of faith in business heads. The first method is development from scratch, where the entire exchange is built from zero. This option can be preferable if you need a unique and new DEX platform. However, the average cost ranges around $1,00,000 depending upon the requirements and can take up to a year time.
On the other hand, the second option is using a DEX clone script which could be ideal in terms of both cost and time. Using clone software, entrepreneurs can replicate a popular DEX platform instantly. The clone script is also open to customizations and the average cost ranges around $8,000 to $18,000 based on requirements. Using the Decentralized exchange clone script from a reputed Defi development company, a decentralized platform can be deployed within a week.
Final thoughts
For aspiring entrepreneurs looking to start a DEX platform, the best solution is to approach a top DEX development company. These companies will have an excellent track record of helping entrepreneurs build their dream DEX business. Since many companies are offering DEX development solutions, it is important to find the ideal company that can suit the requirements.
