Leading DEXs have seen their native cryptocurrencies post solid gains this year. Discover which ones have gained the most in 2023.
Key Points:
Several leading DEX cryptocurrencies have returned over 50% year-to-date (YTD).
The leading DEX, UniSwap, has seen its native token return over 20% YTD.
Most DEX tokens continue to trade well below their all-time highs despite posting solid gains this year.
Decentralised Exchanges (DEXs) allow users to trade cryptocurrencies without submitting KYC or accepting the risk posed by centralised platforms. Even if you aren’t interested in using DEXs for trading, they remain a valuable market for traders and investors as they operate using native utility tokens that generally appreciate in value if the DEX is successful. This post will show you the five best DEX crypto tokens of 2023 and introduce you to what a DEX is and how it works.
What Is a DEX (Decentralized Exchange)?
A DEX is a decentralised cryptocurrency trading protocol that is used to swap tokens, earn yield and carry out other on-chain activities. Crucially these platforms don’t involve a third party when executing transactions, unlike traditional financial services and centralised exchanges (CEXs).
Users trade their digital assets direct from their wallets, thus eliminating the need to hand over private keys to a central authority. A DEX facilitates direct P2P trades between users through smart contracts that automatically execute trades and leverage liquidity pools.
Top 5 DEX Crypto Coins of 2023
Dozens of DEXs have been launched in the past couple of years, but the bear market in 2022 saw many of them lose almost all of their total value locked (TVL). In 2023 several projects that were able to weather the bear market have been rallying.
1. dYdX ($DYDX)
Market Capitalisation: $372 million.
YTD Gains: 95%
Current Price: $2.1
$DYDX is the native token on the dYdX decentralised exchange protocol. The protocol is deployed on Ethereum, and it's designed specifically to facilitate perpetual swap transactions. The exchange uses zero-knowledge proofs (ZK) to facilitate privacy-orientated transactions, making it a popular choice among traders who don’t want to reveal their identities.
According to DeFiLama, dYdX has a TVl of $340 million. The exchange’s native $DYDX token has a maximum supply of 1 billion, of which 172 million are in circulation. YTD, the token has returned 95%, and in the past month, it's been consolidating around $2.
2. Raydium ($RAY)
Market Capitalisation: $47 million.
YTD Gains: 50%
Current Price: $0.2
$RAY is the Raydium DEX’s native token. The exchange uses an Automated Market Maker (AMM) system deployed on the Solana ($SOL) blockchain. By using Solana instead of Ethereum, Raydium has reduced transaction costs, but it has arguably sacrificed a layer of security which came back to bite the project in late 2022 when an exploit stole $2 million worth of funds from various liquidity providers.
Since the hack, Raydium has managed to recover some market confidence, and $RAY has been rallying from its post-hack lows. YTD, the token has returned 50%, but there’s still plenty to be done to reach its pre-hack price of $0.5.
3. IDEX ($IDEX)
Market Capitalisation: $35 million.
YTD Gains: 45%
Current Price: $0.05
The IDEX is a hybrid liquidity exchange that uses a combination of AMMs and a standard order book system to settle transactions. The combination of the two market-making systems takes advantage of the simplicity of order books while adding the ability of AMMs to reduce price slippage and improve security.
IDEX recently announced that it would launch the exchange on the Polygon ($MATIC) network, which has helped its $IDEX sustain its rally. The Polygon launch is expected to reduce transaction costs on IDEX and potentially help it grow its user base. YTD, the token is up 45% and has a market capitalisation of $45 million.
4. THORChain ($RUNE)
Market Capitalisation: $467 million.
YTD Gains: 22%
Current Price: $1.55
$RUNE, the THORChain’s native token, has been rallying for weeks, gaining more than 65% in the past two weeks. The recent rally has been sparked by an upgrade to the THORChain DEX network that will see it improve its lending features and launch a burning mechanism that will reduce $RUNE’s supply. $RUNE was trading for over $20 before the bear market, so even with its YTD gains, it still has a long way to go if it's going to recover its losses. Price predictions are generally bullish on the token, but a short-term pullback could be on the cards following the recent rally.
5. UniSwap ($UNI)
Market Capitalisation: $3.6 billion.
YTD Gains: 20%
Current Price: $6.2
UniSwap is the leading DEX by market capitalisation and arguably one of the most user-friendly and popular DEXs on the market. UniSwap is deployed on the Ethereum blockchain and uses an AMM protocol to facilitate P2P trades. UniSwap offers one of the widest ranges of trading pairs out of all DEXs, and due to its popularity, it has deep liquidity pools and numerous yield farming and staking tools. $UNI has gained around 20% YTD and 6% in the past week. Price predictions generally expect $UNI to post long-term gains, with some analysts setting double-digit targets in the long term.
Should You Invest in DEX Crypto Coins?
DEXs are a crucial part of the crypto economy. They offer true P2P trading solutions, and many of them, such as UniSwap and THORChain, are leading the way in offering users the opportunity to earn yields for contributing to liquidity pools. The bear market has seen most DEXs lose considerable TVL, and their native tokens saw their market capitalisations slashed, but all five coins in this post have posted solid gains this year as they attempt to recover from the 2022 crash.
