The Cheapest DEXes To Trade On Layer 1 Ethereum
November 30 2021 - 11:26AM
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The past couple of years has seen decentralized finance (DeFi)
maintain a meteoric rise. Such an impressive growth can only mean
one thing—a rise in decentralized exchanges as well. With
centralized exchanges proving a little complicated and problematic
at times, the crypto space will agree that decentralized exchanges
are the future of cryptocurrency trading on Layer 1 Ethereum. While
these decentralized solutions are great and have caused a rise in
DeFi activities, users have had to contend with paying miners
higher transaction/gas fees. But these solutions don’t have to be
expensive and there are some great exchanges keeping things
economical. Here are some of the cheapest DEXes to trade on layer 1
Ethereum. #1. Balancer Balancer launched in 2020 as an Automated
Market Maker allowing DEXes to function more efficiently in 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. The protocol has set out to
make loads of features solid but streamlined. Balancer has recently
integrated with blockchain network Gnosis, creating the
Balancer-Gnosis protocol (BGP). Their joint work culminated with
the launch of CowSwap DEX, which has users needing only to pay a
fraction of the gas fees other traders pay to use other DEXes. The
gasless option however only functions for ERC-20 tokens. #2.
Uniswap Uniswap is seen as the benchmark for decentralized
exchanges in the crypto space. The platform is the most used DEX,
recording a 7-day trading volume of $12.5 billion in September.
Uniswap is also the biggest gas consumer on the Ethereum network.
While Ethereum transaction fees have gone really high over the
years and have become economically non-viable for less bigger
users. However, Uniswap tries to keep things cost-effective for
traders. It charges three fee tiers of 0.05%, 0.30%, and 1.00%,
depending on the pair. Fees are paid to liquidity pools #3.
Sushiswap Sushiswap and its token, $SUSHI, were launched in August
2020 as a decentralized exchange and a crypto token respectively.
Sushiswap offers traders a 0.3% fee for swaps. Out of this fee,
0.25% of it is forwarded to the liquidity pool while the remaining
0.05% is distributed to the holders of SUSHI token. #4. 1inch The
1inch platform utilizes a gas token called Chi which is minted when
gas prices fall and burnt when gas prices are high. It allows the
exchange to save at least 40% in gas fees despite trade going
through exchanges like Sushiswap or Uniswap. It charges no swapping
fees. The DEX aggregator searches for some of the best rates on
more than one dex. It splits the trade by pools to retrieve the
maximum number of tokens possible in a single transaction. This is
great for bigger trades where passing through multiple exchanges
will be beneficial to maintain a better exchange rate while
reducing lost value from gas fees. #5. dYdX dYdX is primarily a
derivative decentralized crypto exchange. On dYdX, there are no
deposit or withdrawal fees associated with transactions. Users are
however responsible for the cost of gas that accrues from their
withdrawal or deposit transactions. However, the platform charges
takers a fee of 0.10% and makers 0.05%. A recent study shows that
the fees that dydx charges are higher than the industry average
contract trading fees. Conclusion At the moment, DeFi platforms are
getting the well-deserved recognition and patronage they deserve
from investors and consumers. Despite struggling with rising
transaction fees, DEXes on the Ethereum layer 1 blockchain is still
out to offer some of the cheapest decentralized exchanges for
traders to thrive on. If you’re on the lookout for a DEX you can
trust, you can start with Balancer and other DEXes on the list.
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