DEXes and their Differences
A decentralized exchange or DEX, is a peer-to-peer marketplace that connects cryptocurrency buyers and sellers. DEXes employ smart contracts that self-execute under set conditions and record each transaction to the blockchain. ZebPay now lists a total of four DEX projects for trading. Let’s take a closer look at them.
DEXes are important because:
- You have control on your private keys. Private key, let’s say, is an alphanumeric string that allows you to access your digital assets.
- Centralized exchanges don’t have a private key.
- Centralized exchanges choose the cryptocurrencies they list, they record the transactions and they are in charge of the “network” fees.
- You don’t need to do KYC, AML procedures for a DEX, the gas fees are standard.
1Inch is a DeFi aggregation platform that analyses all the DEXes for you to provide the best possible exchange rate. 1Inch splits the amount into several parts and then swap each part with the best part at a different DEX.
It burns gas tokens inside transactions to make them cheaper than anywhere. 1Inch recently launched their V2, with pathfinder which was the main component of this release. Pathfinder is an API containing a new discovery and route algorithm which finds the best possible paths for token swap in the shortest possible time. The UI is more intuitive and user friendly, also faster response times.
Curve Finance has 3 features:
- An exchange for stable coins.
- Operate as a liquidity provider.
- Operate as a yield farming platform.
The growth of stablecoins has led to the demand of trade between stable coins and that’s the issue that Curve Finance is trying to meet. Trading between stable coins leads to the issue of liquidity pools balancing supply and demand.
CRV is a platform that rewards you for depositing your coins and providing liquidity. Essentially, bringing you on board as a market maker.
Not to be confused with the Japanese delicacy, Sushi Swap is an Automated Market Maker (AMM). You basically use Smart Contracts to create a market for token swaps. Because Sushi exists as an AMM, that is what makes it unique. There are no order books, liquidity issues which exist in traditional DEX’s.
Similar to CRV, Sushi rewards it’s users for using the exchange. Sushi Swap drew its inspiration from Uni Swap initially but aims on improving what Uni Swap provides.
The supply of SUSHI depends on the block rate (100 per block). At approximately 6,500 per day, and therefore 650,000 newly minted tokens, there will be roughly 236 million tokens in circulation by September. Hard to believe, since it was launched last year, yes!
It’s literally everywhere. You’ve probably heard of Uniswap if you’ve been into crypto for a while…
Or you’ve heard of THE AIRDROP. In September 2020, Uniswap gave away 400 tokens amounting to $1200 at the time if you had interacted with the platform. This is one of my I was there moments in crypto!
Uniswap was created as a trustless, decentralised financial exchange. The protocol allows financial transactions of Ethereum-based tokens only. Uniswap is built on the Ethereum blockchain, so naturally everything works with the use of smart contracts.
Uniswap replaces traditional centralised market tools with automated and permissionless liquidity pools executed purely by algorithms. Now, it is one of the largest decentralized exchanges in the crypto space and for many the magic has just started.
This is just a quick overview of the tokens. Feel free to explore more and let us know what you think.