Top Decentralized Exchanges (DEX) – Rankings, Comparison & Analytics

Centralized exchanges store users' funds, require registration and KYC, and are controlled by a company. DEX does not store users' funds (they remain in personal wallets), does not require personal information, and operates based on smart contracts without a central governing entity. DEX provides greater privacy and the ability to trade tokens that are not listed on exchanges. However, when exchanging tokens, users pay network fees, and liquidity and transaction speed may be lower.

Liquidity on DEX is provided through liquidity pools, where users (liquidity providers) deposit pairs of assets in a specified ratio. In return for providing liquidity, they receive rewards in the form of transaction fees and often additional platform tokens. Some DEX platforms also use cross-chain bridges to merge liquidity from different blockchains.

Automated market makers (AMM) are algorithms that replace the traditional order book on DEX. They use liquidity pools, into which users deposit asset pairs. When an exchange occurs, the ratio of assets changes, which affects the price. Liquidity providers receive rewards in the form of transaction fees and governance tokens.

Security on DEX is ensured by multiple layers of protection. First, smart contracts are audited for security by independent companies. Second, users maintain control over their funds through non-custodial wallets without giving private keys to the exchange. Third, transactions are confirmed and recorded on the blockchain, making them irreversible and transparent. Many DEX platforms also use governance mechanisms (DAO), allowing the community to vote on security updates and the implementation of new protection protocols.