Comparing the Best DEX Platforms in 2022

Decentralized exchanges (or DEXs) are going to disrupt the future of trading on blockchains. They allow one to trade freely, without a need to get confirmation from centrally owned entities, make swaps, provide liquidity, and be part of the growing network. As many Layer-1 blockchains are created and used in the past years, each blockchain also has its own well-known DEXs. In this article, we are going to dive into the most well-known DEXs that operate on main blockchains.


Uniswap - operating on Ethereum

Constant Product Market Maker (CPMM) is a variant of Automated Market Maker model utilized by Uniswap and other major ERC-20 DEXs like Bancor and Curve. AMMs are smart contracts that allow liquidity providers (LPs) to engage with a liquidity pool to add or remove liquidity.


Liquidity providers on Uniswap must put in equal value Ethereum (ETH) and an ERC-20 token (such as AAVE, DAI, etc) into a smart contract. Users who trade on the Uniswap exchange pay a 0.3 percent charge that is split amongst all liquidity providers in the same liquidity pool. In other words, by allowing their idle cash to sit in a smart contract, liquidity providers can earn benefits. 

Liquidity is equally spread over an x*y=k price curve in Uniswap v2, with assets held for all values between 0 and infinity. The majority of this liquidity, according to Uniswap, is never used. As a result, v2 liquidity providers get fees on only a small part of their assets, which may not be enough to compensate for the Uniswap exchange impermanent loss. Furthermore, because liquidity is thin across all price ranges, traders are frequently subjected to large levels of slippage.


On May 5, 2021, Uniswap v3 went live on the Ethereum mainnet, bringing a big upgrade to address the issue of impermanent loss. Liquidity providers focus their capital within specific price ranges in order to provide more or less liquidity.


PancakeSwap - Binance Smart Chain (BSC)

PancakeSwap is a DEX that operates on Binance Smart Chain. In other words, it is similar to established platforms such as UniSwap in that users can swap their coins for other coins without the involvement of a middleman.The sole distinction is that PancakeSwap focuses on BEP20 tokens, a Binance-developed token standard. The BEP20 standard is simply a checklist of features that new tokens must have in order to be interoperable with the Binance ecosystem of dapps, wallets, and other services.


Within the PancakeSwap platform, the CAKE token is used in a variety of ways, including:

  • Yield farming

  • Staking

  • Voting on Governance Proposals

  • PancakeSwap Lottery

  • Later on, NFTs were also integrated into the pancakeswap and many collections are traded there.


TradeJoe - Avalanche (AVAX)

Trader Joe is a decentralized one-stop-shop trading platform built on the Avalanche blockchain. Originally, it was a fork of Sushi Swap, but within a short period of time, TJ became very famous among the Avalanche community. The features are very similar to the features of other DEXs.

One can share the Swaps revenue generated by the platform. All Swap fees (0.30 percent) revenue is divided to Liquidity Providers (0.25 percent) and sJOE stakeholders (0.05 percent ).


By integrating meme culture into the DeFi world, Trader Joe has done a tremendous job with less than a one-year period. With the motto of being a one-stop-shop, recently TJ integrated the NFT marketplace as well. One can buy and sell NFTs on the protocol as well.


Raydium - Solana

Raydium is a DEX that powers the expansion of DeFi by acting as an on-chain order book AMM (automatic market maker) on solana. Raydium provides on-chain liquidity to a central limit order book, unlike many other AMM platforms. That implies Raydium users and liquidity pools have access to the full Serum ecosystem's order flow and liquidity, and vice versa.


On Raydium, liquidity providers can earn incentives from trading fees in exchange for their contributions. As farming rewards, key pools are rewarded with $RAY assets. Extra reward tokens can be added by projects that want to compensate users for supplying liquidity.


Surprisingly, as the platform matures, it intends to collaborate with other DeFi and AMM communities and provide support for other products to be built on Solana. As a result, additional liquidity will be introduced, and new DeFi protocols will be added to the Solana ecosystem. Raydium can bring more flexibility and functionality to future versions and new features with these additions.