In the last few years, Decentralized Finance (DeFi) has been on a steady rise. Such an impressive growth can only mean one thing—a rise in decentralized exchanges as well.
The crypto community will recognize that decentralized cryptocurrency exchanges on Layer 1 Ethereum are the way forward. Centralized exchanges can be a problem at times and can prove to be a little confusing.
These decentralized solutions have been great for DeFi and caused an increase in DeFi activity. However, miners have charged users higher gas/transaction fees.
But these solutions don’t have to be expensive and there are some great exchanges keeping things economical. These are the best DEXes for trading on Ethereum layer 1.
Balancingr was launched as an automated market maker in 2020, enabling DEXes and other DEXes more efficient use of the DeFi space. One of Balancer’s aims has been reducing gas fees for traders on Ethereum and making liquidity pools relatively gas-efficient for new smart contracts.
This protocol aims to simplify and make many features more solid. The Balancer-Gnosis protocol was created by the integration of Balancer with Gnosis blockchain network. They collaborated to launch CowSwap DEX. This allows users to only pay a fraction the gas fees that other traders have to use other DEXes. ERC-20 tokens are the only ones that can use this gasless option.
Uniswap has been regarded as the standard for crypto-related decentralized exchanges. It is currently the most popular DEX with a trading volume of $12.5 million per day in September.
Uniswap also is the largest gas user on Ethereum. Ethereum transaction fees are very high and no longer economically viable for smaller users.
Uniswap tries however to be cost-effective and affordable for traders. It has three fees tiers: 0.05% to 0.30% and 1.00% depending on which pair. Liquidity pool fees are payable
Sushiswap, its token $SUSHI and its decentralized exchange were both launched August 2020. Sushiswap charges traders 0.3% for swaps.
The liquidity pool receives 0.25% and the SUSHI token holders get the remainder.
Chi, a gas token that is issued when oil prices drop and burned when they rise, powers the 1inch platform. This allows an exchange to reduce gas costs by at least 40%, even if trades are made through Uniswap and Sushiswap. Swapping fees are not charged.
DEX Aggregator searches for rates that are the most favorable on several dex. The trade is split by multiple pools in order to get the most tokens from a single transaction. This works well for larger trades, where multiple exchanges are beneficial in order to keep a higher exchange rate and reduce gas costs.
dYdX is an essentially a decentralized derivative crypto exchange. Transactions on dYdX are free from withdrawal and deposit fees. However, users are responsible for any gas costs incurred from withdrawals or deposits.
The platform does charge takers an additional 0.10%, and makers an extra 0.05%. Recent research shows that dydx fees are more expensive than industry-average contract trading fees.
DeFi platforms have been receiving the deserved attention and patronage from consumers and investors.
Even though they are struggling to pay rising transaction fees for their DEXes, the Etheum layer 1-based blockchain still offers some of the most affordable decentralized exchanges available to traders. If you’re on the lookout for a DEX you can trust, you can start with Balancer and other DEXes on the list.