Decentralized Exchanges are one of the foundational infrastructure applications that allow humanity a chance to realize the vision of a digital economy.
Facilitators of trade and focal points for building up on-chain liquidity, DEXs have become one of the hottest sectors of crypto and one of the very few that has proven to have immense product market fit.
A lot of exploration has been done in the category; different models for executing trades, different networks, different incentive mechanisms, governance approaches, routing methods, and so on.
While I would argue that DEXs have become one of the most overly saturated niches full of wannabe copycats due to the ease of replicating it and having consumers understand the concept, It is impossible to ignore the potentiality for innovation and value accrual in these miracle applications.
Here is a reference to the Top Decentralized Exchanges, in my personal opinion (not market capitalization). I will provide a playful summary, including a brief description, background, and some tokenomics and technical specs. At the end of each asset, I will provide a grade for the project and whether or not I would consider investing in it. For the love of god, please don’t take anything as investment advice; this is just for information.
The criteria used to organize this resource is simple; projects must have a decent amount of history, projects must be legitimate (no meme-coin duplicates), and projects must have a token and real teams.
These are in no specific order.
Nothing here is investment advice.
** These are the platforms I am personally familiar with or have used.
** Personal Rating is based on assumptions of longevity, industry importance, and potential for healthy return.
1. UniSwap
The dominant decentralized exchange by every measure. Uniswap is the OG that pioneered the first successful implementation of an AMM (automated market-making) in crypto and marked the evolution of decentralized trade.
Wholly focused on the creation of liquidity for the crypto industry, Uniswap is the pinnacle of on-chain market making and LPing.
Launched in late 2018, Uniswap has gone through now four iterations of its software with the v2 launch in 2020, v3 in 2021, and currently transitioning into the v4. Being the most innovative DEX protocol, every upgrade to Uniswap marks a seismic shift for all market participants; when Uniswap upgrades, everybody else starts to hustle in an attempt to keep up.
The open, interoperable nature of the Uniswap protocol makes it the perfect building block that virtually all other major market participants and startups plug into to source liquidity.
There is something to be said about the ultra-deep connections that Uniswap has with leading institutions in the space; Hayden Adams (the founder) worked at Siemens (where he mastered his craft and established technical credibility) and is friendly with Ethereum founder Vitalik Buterin. In fact, Uniswap was built on the back of the dialogue that Vitalik was pushing through his website. Hayden slid into those DMs and ultimately was able to score a $100,000 grant from the Ethereum Foundation to build the project.
Tinkering around with it for nearly two years, Uniswap was active on main net long before the arrival of its token, UNI. Airdropped to early supporters of the protocol in early September of 2020, UNI sparked so many conversations in the social groups on Twitter, Reddit, and elsewhere around value attribution that it colloquially began to be called the Stimulus checks of the crypto-verse. In fact, there is an argument to be made that the UNI token distribution, in fact, brought the whole concept of airdrops being valid tools back to life.
On the topic of the UNI token, with a max supply of 1,000,000,000 and a distribution of 60% going to its community, 21.51% going to the team, 17.8% to investors, and 0.69% to advisors, the allocation has been interesting to map against its purpose and market activity. As an instrument created exclusively with a governance function, much of the crypto community has been discussing the potential of the token in the event, Uniswap finally turned on some kind of value accrual mechanism tied to the exchange's activity. The logic behind why it has not done so yet, has been to maximize its attractiveness to liquidity providers rather than looking to extrapolate profit from them.
It cannot be overlooked that lurking somewhere beneath what is observable on-chain are those ties with VC’s and industry giants that have actually been called out publically. A16Z’s monster influence over governance has caused controversy around the true state of the project and raised red flags due to concerns of conflicts of interest (after all, A16Z has stakes in many competing platforms and could use its influence to destroy fair competition).
Opinion: UNI has the potential to be the Amazon of the crypto industry. The way the project is developing, how it values attracting LPs over paying dividends, and the fact that it is not overly concerned with establishing a profitable model for the token (yet) could just be signs of mature, contrarian thinking that avoid hype and pursues real, long-term value creation. As a protocol, there is nothing remotely as important as Uniswap; they are the foundation for AMM innovation.
🤔 Would I Invest: Yes
🧮 Personal Rating: 8
🌐 Website: https://uniswap.org/
📊 CMC: https://coinmarketcap.com/currencies/uniswap/
2. Curve (CRV)
The leading stable-swap; is a decentralized exchange built exclusively for making markets with stablecoins. Ahead of their time, curve set out to solve what might be one of the largest monetary/economic problems that plagued (and still do) the crypto industry’s adoption by commercial entities, slippage and liquidity.
Initially conceptualized under the name stableswap and releasing its whitepaper in the first half of 2019, Curve officially launched its token CRV and instantiated the Curve DAO in April of 2020. Somewhat contrarian to the usual hype cycles that crypto project leverage for their token drops, Curve actually did a stealth release, taking the industry by surprise (could also have been a part of their strategy, but nonetheless, it was a breath of fresh air at the time).
The CRV token has become a hallmark of value for governance over a decentralized protocol. As of this writing over 680 million of the total circulating supply of 1.6 Billion have officially been locked into ve (vote escrow), with an average duration of 3.5 years, and that trendline is accelerating faster than the release schedule. Total supply of the CRV token is around the 3.3 Billion mark (so about 1/2 of the total supply has been released, with the remaining half to complete its emissions in August of 2026.
There has been ravaging competition from users trying to gain control over the DAO/voting of the platform, erecting derivative protocols (Such as Covex) that re-stake locked CRV tokens. With external protocols aggregating tokens, those protocols, in turn, become the very entities that garner the majority of the voting power.
Building on the success of Uniswap, Curve molded its protocol utilizing the AMM model as well but amplified it with something called dynamic pegging.
By focusing on providing liquidity between tokens pairs of like value, they created a two-sided ecosystem of what they referred to as a “Uniswap with leverage” for consumers and a “savings account” for liquidity providers.
First and foremost, by having pairs that are tightly coupled in value, Curve is able to reduce slippage to an absolute bare minimum and facilitate the transfer of value between different providers without causing excessive liquidity loss.
On behalf of the market makers/liquidity providers, the concept of impermanent loss is averted (given that asset values are always equal) and revenue becomes more predictable, in turn tapping into an invitation for more risk-averse, deep-pocketed entities.
Currently sitting just north of $3.6 Billion USD as of this writing, Curve has more liquidity locked in its protocol than Uniswap. Boom.
💭 Opinion: A force to be reckoned with. Curve has become such a valued project that it has spurred the creation of derivates and competitors across multiple chains. The competition for control over the veCRV ecology has given rise to protocols that leverage those staked tokens for amplified yields. Whenever projects become so powerful that new protocols are built around them, that means intelligent, well-funded entities are committing to it; which in turn acts as a signal for potential implicit value that is not easily perceptible through public documentation. Within the context of stable-swaps, there is nothing even remotely close to dominating as much of the market as Cuve.
🤔 Would I Invest: Yes
🧮 Personal Rating: 8.5/10
🌐 Website: https://curve.fi/
📊 CMC: https://coinmarketcap.com/currencies/curve-dao-token/
3. 0x Protocol (ZRX)
Another OG.
Since its launch in 2017 via an ICO, the project has undone perhaps the most metamorphosis to its identity that I have seen; perhaps this was due to a difficulty in articulating the value proposition or just finding ideal market fit, but 0x has changed its website, general branding, and mission statement multiple times. This is not a bad thing; on the contrary, to me, it looks like a lot of pivoting in order to arrive at an image that resonates with the founders and the industry at the highest level.
Sitting somewhat apart from the vast majority of other projects that use the AMM models and preach bonding curves, what makes 0x Protocol stand out among the crowd is how it has positioned itself as a “settlement layer” for decentralized exchange. Rather than being the facilitator of trade, it acts as a piece of infrastructure upon which any kind of venue can be built. Anything from an eBay auction house, to an Amazon marketplace and of course, variations of decentralized exchanges. 0x can be used to build a DEX with an orderbook model function with the granularity and control of order flow familiar to legacy financial giants.
With a total supply of 1,000,000,000 (one billion) ZRX tokens and having already 85% circulating, the state of its tokenomics is approaching that inflection point of maturity. However, given that during the initial ZRX allocation/distribution, 50% was handed out to the ICO investors at a price that is still better than even bear market low rates, there seems (at least to me) to be a cap on how much the token will run because these investors still likely possess sizeable portions of the tokens and will be selling them off around next local highs.
💭 Opinion: Potential to be a Sleeping giant. ZRX has already weathered two radical market cycles and has shown that the project is much more than just a speculative token, and its infrastructure has been gaining adoption steadily over time. Although, something that is distressing (at least for the near term) is how many tokens are staked, its just under 5%; with just 41 million tokens staked of the 850 million circulating, the ratio is ~20.7 (possibly one of the worst I have seen)
🤔 Would I Invest: Maybe, investing no, trading possibly.
🧮 Personal Rating: 7.25
🌐 Website: https://www.0xprotocol.org/
📊 CMC: https://coinmarketcap.com/currencies/0x/
4. PancakeSwap (CAKE)
The AMM of the Binance Smart Chain.
A replica of Uniswap with the most robust ecosystem of supplementary functions. Everything from lotteries to bridges to perpetuals to their own game and even an affiliate program, Pancake Swap takes the crown when it comes to the gamification aspect of a trading platform.
Taking inspiration from many of the gambling application styles that are common in the Asian markets, the appeal of Pancake Swap to retail is massive and yet still relatively untapped. Branding is rare element to get caught up on the crypto space given the absolute degen disregard for class (broadly speaking)
Given that the project is deployed to BSC (one of the most adopted chains by user retail user count), the low fees have an interesting correlation with the TVL; there is none. Trading fees fall an order of magnitude lower (than ETH), yet the total amount of value locked in Pancake Swap is floating around $2 Billion USD (roughly half of UNI). Nonetheless, the platform is facilitating over $500 Million USD in weekly trade volume easily.
When it comes to the Token economics of Pancake Swpas native token $CAKE, things have a strange, uncomfortable complexity with levers and pulleys and a (just my opinion) painfully stupid burning concept that just looks like accounting tricks. This might be due to the naming of all the objects, which are definitely informal and degen friendly; but, the basic idea behind the burning mechanism is a per block emission of 40 $CAKE, of those, 35 get burned, and 5 get distributed to stakers/LPs and other rewards. To me, this is beyond stupid. Why mint them in the first place? I digress. Moreover, this makes it ridiculously difficult to track the true amount of supply outstanding on a rolling basis.
On the other side of the tokenomics equation, with a 750,000,000 tokens cap, 208 million in circulation, and 250 million currently staked into the syrup pools, all in all, the prospect of the token finally transforming into a tool that will be able to accrue value (once the excessive emissions and reward rates deflate a little more) definitely exists. If we assume that nearly 2/3 of the tokens have already completed their arrival to market, then Pancake Swaps $CAKE is a short year or two away from reaching maturity.
Ultimately Pancake Swap lends itself more to a platform with a DEX function being its core use case that it does some kind of breakthrough protocol. This is neither good nor bad; just a matter of preference.
💭 Opinion: I support Binance at large and have respect for the BNB/BSC ecosystem as a whole; in fact, I draw a lot of inspiration from Pancake Swap and would definitely use it for facilitating liquidity for a new project. Overall, its presence is a net benefit to the ecosystem. However, this could just be my bias or lack of understanding; I cannot stand their branding; it's like Disney meets Zuckerberg's metaverse for gambling. The lack of technological innovation here also is kind of boring.
🤔 Would I Invest: No
🧮 Personal Rating: 7
🌐 Website: https://pancakeswap.finance/
📊 CMC: https://coinmarketcap.com/currencies/pancakeswap/
5. 1inch (1INCH)
The badass branding, evil twin version of Uniswap.
1inch takes the other side of approaching the market for end users rather than for LPs; they are definitely a retail product.
1inch is an aggregator of DEXs and one of the most recognizable brands in the space. They have provided quite a robust ecosystem of tooling, including limit ordered on AMMs, liquidity optimization, and a third tool that I believe to be among the absolute best innovations in the DEX space. Known as rabbithole, 1inch created a solution to the single biggest problem for end users that want to partake in on-chain activities MEV. Rabbithole specifically caters to MetaMask users that constantly get abused by sandwiching attacks.
Additionally, which might be the crown jewel for 1inch at the moment is its Fusion protocol, which allows user to facilitate trade across DEXes on different chains without incurring the network fees. This gas abstraction positions 1inch ahead of absolutely every other aggregator on the market.
Tokenmically the project is ok. The 1INCH tokens serves two functions within the ecosystem, first and foremost, surprise, another governance token. Second, the tokens can be staked to accrue UP (unicorn power) and delegating it to Resolvers. Resolvers are network nodes that power the trading engine and capture arbitrage opportunities. By sharing Unicorn Power with Resolvers, users are able to earn some of the profits that they earn.
With a max supply of 1,500,000,000 (1.5 Billion) tokens and having almost a 2/3 of them (~950 million) already circulating, 1INCH falls into the category of tokens that are entering their final trimester of maturation.
💭Opinion: Great project. Unfortunately, the nature of 1inch lends itself to being inclusive/exclusive based on jurisdiction. United States and other sanctioned countries cannot access it. Nothing wrong with being a centralized project at all; so long as it serves great purposes to end users and solves real problems, 1inch will be a permanent player moving forward.
🤔 Would I Invest: No
🧮 Personal Rating: 7
🌐 Website: https://1inch.io/
📊 CMC: https://coinmarketcap.com/currencies/1inch/
6. dYdX (DYDX)
The promise child.
dYdX is one of the more unique projects in the decentralized exchange space. Unlike the vast majority of other DEX’s that have become obsessed with the AMM model, dYdX consciously chooses to position itself as an exchange exclusively for trading Perpetual contracts of digital assets.
Founded by one of the early engineers at Coinbase, the project launched in 2017 and has ever since been making steady strides toward realizing its vision. Going to a multitude of structural rehypothecations, from trying to launch its own blockchain in-house, to living on ethereum with some footprint on Starkware, and recently announced that it will be moving to the Cosmos ecosystem and launching as an app chain (this way it will have its own blockchain, but the infrastructure will just be borrowed from Comos and leverage their consensus; as well as, potentially being able to tap into their ecosystem of liquidity from other projects).
TVL is currently sitting at $350 million USD. Given that it declined from its peak of $1 Billion by 67%, which is actually in line with the overall decline in crypto prices, dYdX has built a strong foundational community that has kept its money with the protocol throughout a bear market.
On the tokenomics of the project, things don't look too hot. Set for distribution over the course of a 5-year period starting from the first emission in August of 2021, there are only 156 million dYdX tokens, of a total 1 billion, currently in circulation (~16%). This is very, very low for a project that makes constant claims of being so community driven/focused. Allocation is decent, not too dissimilar from other exchanges; 50.00% to community, 25.00% trading rewards, 7.50% retroactive mining rewards, 7.50% liquidity provider rewards, 5.00% community treasury, 2.50% to users staking USDC to a liquidity staking pool, 2.50% to users staking DYDX to a safety staking pool, 27.73% investors, 15.27% founders, employees, advisors, and consultants, 7.00% as incentives for future employees and consultants.
What stands out most of all about dYdX is its level of adoption and use. In terms of raw volume and user count, dYdX absolutely owns the perp market. Facilitating 30-day volumes of over $37,000,000,000 dYdX is >7x more active than its closest competitor. While this could be in part due to the fact that dYdX has strong support from the industries leading VCs, the general social presence (evaluated through the lens of social media platforms and the governance forum) expresses a tightly knit, committed community for it.
💭 Opinion: Love the ideology, don't like the execution. Overall the project is solid and has a good chance at existing for a long time. However, even though there is quite a decent amount of innovation and technological prowess imbued into the team and concept, it feels like it just doesn't quite meet the caliber of infrastructure-grade projects. On the flip side, the formal yet inviting branding of the platform might be inviting for the next batch of users/investors that will be coming on-chain over the next decade.
🤔 Would I Invest: No
🧮 Personal Rating: 7
🌐 Website: https://trade.dydx.exchange/
📊 CMC: https://coinmarketcap.com/currencies/dydx/
7. Bancor (BNT)
An ecosystem of protocols that deal with different verticles of the decentralized exchanges, Bancor is another OG with a unique value proposition from the 2017–2018 era that has been shipping innovation since its inception.
Bancor has been another chameleon in the space in terms of much its position has changed over the course of its existence. Rebranding multiple times (not the name, the presentation of the concept), Bancor was initially received with open but has since had trouble competing with the onslaught of innovations. However, Bancor has produced one of the more interesting breakthroughs for AMMs in general, that being single-sided liquidity provision.
It is one of the few genuinely intellectually stimulating projects that for some odd reason, was never able to set into higher economic territories in the last cycle, possibly due to the very intentional tokenomic design.
With no total max supply, the BNT token acts as a backstop and counterbalances the liquidity flow through its systems. Effectively the BNT token is the focal point that allows for single-sided liquidity to occur. In typical AMMs whenever liquidity is deposited, it must be done so with a pair of tokens in equal value; in order to allow users to deposit only a single token, new BNT tokens are generated to complement their deposit to facilitate trading. So if token XYZ is deposited and somebody makes a swap for ETH, then the BNT token will deplete in one pool and refill in another, abstracting away the need to create direct pools. This model has not been tested before and could have contributed to skewed valuations.
💭 Opinion: Bancor exists on the fringes of innovation and is either a single breakthrough away from gaining industry-wide praise and finally claiming a rightful place among the forever giants or slowly dwindling into a nothing burger that everybody forgets about over the course of the next two cycles. Technologically, Bancor will forever be a part of crypto history; economically, it might seize to matter; unless something triggers a fundamental evolution in the token's value accrual.
🤔 Would I Invest: No
🧮 Personal Rating: 6
🌐 Website:
📊 CMC: https://coinmarketcap.com/currencies/bancor/
8. Balancer (BAL)
An effective extension of the AMM concept with the ability to create Indexes and multi-asset pools. One of the more unique decentralized exchange applications with a suite of functionality that extends beyond swaps.
Like any other DEX, the key component of this project is to build liquidity and improve trading for market participants. Balancer implemented novel features at the time of its launch, specifically around the ability to create token pools of any arbitrary assets in any arbitrary proportion, effectively transforming liquidity pools to serve the dual function of an index. One of the key design implementations of the project that attracted attention early on was the flexibility in defining fees, it is the only protocol to offer a range bound set between 0.0001% and 10%.
Furthermore, the Balancer pools come in three distinct flavors, Shared Pools, Private Pools, and Smart Pools. Shared pools are open to having external liquidity providers contribute and have hard-set parameters that cannot be altered; Private Pools are for individual ownership and control rights at their full discretion; Smart Pools are variants of the Private Pools that nominate smart contracts as the owners.
Conceptualized in 2018, Balancer was launched in mid-2020 by crypto natives that have been involved in other foundational projects such as Maker. Initially developed without a token, BAL was launched in the footsteps of the Compounds COMP governance token model to begin distributing some degree of ownership and building stronger community ties.
The BAL token presents an interesting set of economic designs that deserve to be inspected deeper. With a maximum supply of ~96 million tokens and over ~50 million circulating, emission still has some price suppression to exert on the project. As is the case with most other prominent platforms, Balancer’s native token BAL is dedicated to governance of the platform. In the early stages of the project, the token doubles as a mechanism to bootstrap and attract an early community, but after distribution is complete, the utility will drop back into just platform/protocol ownership.
💭 Opinion: Balancer is highly respected in the crypto industry and has a multitude of integrations across other major protocols. Receiving tremendous support from a multitude of different industry verticles, the flexibility and composability of the project positions it for eternal industry presence. From portfolio management to yield-generating mechanisms, indexes, and of course, dynamic multi-asset liquidity pools, Balancer has created more than just another me-too product; they have actually created a primitive for other projects to build upon.
🤔 Would I Invest: Yes
🧮 Personal Rating: 7.5
🌐 Website: https://balancer.fi/
📊 CMC: https://coinmarketcap.com/currencies/balancer/
9. Trader Joe (JOE)
The DEX of AVAX (Avalanche’s ecosystem).
One of the lesser-known projects, Trader Joe is a DEX and DEFI ecosystem with lending/borrowing, LPing, trading, and even an extension of their own NFT marketplace.
From the standpoint of the technological, the simple truth is that there is nothing special about it. The brand itself is a great reflection of the user-side target market and the complexity of technology; average.
On the social side of things, Trader Joe has done will when compared to many other tier-two projects for the simple fact of how intuitive and friendly the experience and interface are. Lighting fast transactions, extremely low fees, and well-aligned branding has built it a decent community in size; however, as can be seen through an empirical observation, it seems that there is an outsized weakness in terms of engagement. It's almost non-existent.
💭 Opinion: Average is the name of the game here. While I would definitely use the platform to conduct some DEFI on AVAX, I would never invest in the token. As for locking up liquidity into it, I'm somewhere between never and meh, maybe. The only reason this has been put on this list is because I've used it before and, honestly, am silently rooting for them to win. If all goes well, Trader Joe will be THE DEX on Avalanche; and I am a strong supporter of AVAX.
🤔 Would I Invest: No
🧮 Personal Rating: 6.75
🌐 Website: https://traderjoexyz.com/avalanche
📊 CMC: https://coinmarketcap.com/currencies/joe/
10. Sushiswap (SUSHI)
The vampire of the DEX sector.
Sushiswap launched in what might be the most controversial way of any other DEX.
Created by an anonymous group of individuals that went under the pseudonyms “Chef Naomi, Sushiswap, and 0xMaki” the project was launched as a carbon copy of Uniswap. Immediately after launch the project attempted to conduct a vampire attack on Uniswap to suck out all of its liquidity by providing powerful incentives for LPs to switch platforms.
After reaching a decent level of success, attracting billions of dollars through this method, the leader of the Circus, Chef Naomi, pulled of a heist, selling off his/her UNI tokens for some >$13million USD onto the open market and hijacking basically throwing in the towel.
But the controversy only starts here.
In an attempt to unwind the damages of this, Sushiswap ended up being transferred into the loving, caring hands of Sam Bankman Fried (SBF); the man responsible for the infamous FTX saga.
Tokenomically, the SUSHI token is capped at a 250 million token max supply. Today there are over 230 million of these tokens circulating. At a target emission rate of 100 $SUSHI per block, it is a short matter of time until the project completes is emission and loses all of its incentive superiority against Uniswap.
💭 Opinion: Great innovation, great branding, lots of technical experimentation, lots of user emotions rilled to create a sense of permanence; likely dead now. I believe the odds are that once token emissions are over, all of the mercinarial liquidity will pack up and transfer to new platforms with more bootstrapping token incentives or platforms with more revenue-generating activity.
🤔 Would I Invest: No
🧮 Personal Rating: 5.5
🌐 Website: https://www.sushi.com/
📊 CMC: https://coinmarketcap.com/currencies/sushiswap/
Notable projects in the DEX category that deserve to be mentioned include: Slingshot, Osmosis, ThorChain, Kyber, GMX, Matcha, Paraswap, Apex, Orca, QuickSwap, Jupiter, Thena, Raydium, and BiSwap.
This is an extremely saturated market with new projects arriving every other day. While there may be a lot of competition, ultimately, there will only be a handful of winners.
I hope that you find some valuable nuggets of information in here that will serve you on your journey through the Digital economy.
As always,
Thank you for reading.
Live long and Prosper 🥂
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