5 Popular DEX Crypto Coins to Look Out For in 2022
Main Takeaways:
A decentralized exchange (DEX) is a peer-to-peer platform where users can trade cryptocurrencies directly with other users without relying on any intermediaries. Users trade directly from their own wallet without the requirement of KYC.
The majority of DEXs have a native governance or utility token that offers holders benefits such as governance rights, liquidity, and staking rewards.
Popular DEX crypto assets can be easily purchased on Binance in two steps.
Nowadays, many kinds of decentralized exchanges are built on different blockchain ecosystems that cater to all types of users.
Decentralized exchanges (DEXs) are one of the fundamental building blocks of the decentralized finance (DeFi) ecosystem. In this article we will go through a simplified version of what decentralized exchanges are, how they work, and the five most popular DEXs and tokens.
What Are DEXs And How Do They Work?
In simple terms, a decentralized exchange (DEX) is a platform where users can directly trade cryptocurrency without needing an intermediary. At this point, you can argue that this isn't much different than any peer-to-peer trade. However, the primary difference is that DEXs run on various blockchain ecosystems and provide the same services as centralized exchanges, except, you have control of your own private keys and full custody over your funds. To trade on a centralized exchange, your funds would need to be located within a specific centralized exchange wallet. With a DEX, you have full custody of your funds and can trade straight from your wallet. DEXs replace the intermediaries you generally find on centralized platforms with smart contracts that self-execute under certain conditions and facilitate the exchange of funds.
Since there is no central authority, DEXs do not require KYC, and generally have lower fees.
For a more in-depth explanation of how DEXs work, check out our article on What Is a Decentralized Exchange (DEX)?
The Growth Of DEXs
Once regarded as a niche concept, DEXs have seen an increase in adoption with the rise of DeFi and crypto. According to the Block's 2021 Digital Asset Outlook Report, Decentralized exchanges (DEXs) have experienced exponential growth in 2021, exceeding more than $1 trillion in trading volumes since the start of the quarter. The recorded $1 trillion in trading volume shows an 858% increase compared to the trading volume in 2020.
5 Popular DEX Tokens
DEX tokens can have a range of use cases on their native protocol, such as staking for rewards, voting, and more. If you’re considering adding DEX tokens to your portfolio, we’ve listed the top 5 DEX tokens available on Binance below. Keep in mind that the selection of 5 decentralized exchange protocols and tokens are not ranked in any specific order.
Uniswap and its UNI Token
Uniswap is an Ethereum-based DEX automated liquidity protocol. Users do not need an order book or a centralized party to make trades. Uniswap is also open-source, meaning anyone can use the source code and make their own decentralized exchange. Moreover, users can launch any ERC-20 token on Uniswap and list them for free as long as they can supply tokens to the liquidity pool.
UNI is the protocol's native token, and its main function is to govern the Uniswap ecosystem.
Uniswap (UNI), at a price of $5.46 and $3.93B market cap as of 30 May 2022
PancakeSwap and its CAKE Token
PancakeSwap is a BNB Smart Chain-based DEX. Users can swap BEP-20 tokens on PancakeSwap without trusting their funds to an intermediary. Users can earn rewards by staking tokens in the liquidity pools and, like Uniswap and many other DEXs, PancakeSwap is powered by an automated market maker (AMM) model, relying on user-backed liquidity pools to support trades.
CAKE is the governance token that powers the PancakeSwap ecosystem. CAKE holders can vote on the direction of the ecosystem, buy lottery tickets in the PancakeSwap lottery, use it in yield farms to earn more CAKE, stake it in liquidity pools to earn more tokens, and much more!
PancakeSwap (CAKE), at a price of $4.78 and $815.53M market cap as of 30 May 2022
Stellar and its XLM Token
Stellar is a decentralized, open-source payment protocol that allows any form of money to be moved and stored at a low cost. Serving as a DEX with a built-in order book, users can manage buy/sell orders and reliably convert cryptocurrencies to fiat or vice versa. XLM is Stellar's native token that acts as an intermediary currency in transactions.
Stellar (XLM), at a price of $0.13 and $3.48B market cap as of 30 May 2022
THORChain and its RUNE Token
THORCHain is a decentralized Cosmos-based protocol that lets you swap one crypto asset for another without having to lose full custody of them during the process. And, you don't need to rely on order books to source liquidity because market prices are maintained via the ratio of assets in a pool on the protocol's eponymous DEX. Like Uniswap, the THORChain DEX lets you trade and lend their crypto assets by providing liquidity to their asset pools to earn a yield on those assets.
The native utility token of THORChain is RUNE, and holders can use it to stake, trade, and vote on the direction of the protocol.
THORChain (RUNE), at a price of $3.06 and $1.01B market cap as of 30 May 2022
Loopring and its LRC Token
Loopring is a layer-2 protocol that provides developers with the tools to build decentralized exchanges on Ethereum. Its goal is to make trading assets and transactions on Ethereum affordable and fast without sacrificing security. Loopring powers decentralized exchanges by batch-processing thousands of trade and transfer requests off-chain via Zero-knowledge Proofs, dramatically reducing gas consumption and transaction costs.
LRC is the Ethereum-based cryptocurrency token of Loopring and powers the Loopring Exchange. A DEX that lets you trade Ethereum tokens at a lower cost than other DApps native to the Ethereum ecosystem because it's built on top of the Ethereum mainchain.
Loopring (LRC), at a price of $0.53 and $715.74M market cap as of 30 May 2022
Disclaimer: All prices listed are based on the opening price on 30 May on Binance exchange.
This list does not constitute a recommendation or endorsement by Binance to buy or sell any currency.
How To Buy DEX Tokens on Binance In 2 Steps
Looking to add DEX tokens to your crypto portfolio? Get started on Binance in minutes, home to over 275+ cryptocurrencies and the world’s largest exchange by trading volume and user base.
Step 1: Make a fiat deposit via an e-wallet transfer or bank transfer on Binance. Check the available fiat channels for your preferred currencies. For more information check out our in-depth guide on How to Deposit USD via SWIFT.
Optional: Convert your fiat currency to BUSD or USDT so you can trade a greater variety of tokens.
Step 2: Buy the DEX crypto tokens of your choice through a spot wallet purchase or directly with credit/debit card.
Conclusion
Decentralized exchanges play an important part in the rise and growth of the DeFi space. As more DEXs continue to evolve and improve their offerings such as trading and user experience, we will most likely continue to see DEXs innovating and growing across the industry.
With that said, different DEXs have their unique operation processes, so it’s also important to understand that before committing to any DEX coins. Always DYOR!
Start building the crypto portfolio of your dreams on Binance
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