The Best Decentralized Exchanges for Building dApps

Which decentralized exchange is the best source of liquidity?

A decentralized exchange (DEX) leverages a system of smart contracts to bypass the need for a company to oversee token conversions. Building your dApp with a DEX is the most secure and trustless way to manage token swaps.

However, picking the right DEX as a liquidity provider can be challenging due to price discrepancies and differing operational protocols.

Below we sift through the details of five top DEXs and explain how using Totle can allow you to benefit from all of them.

Five top DEXs

Bancor operates as both an exchange and self-balancing exchange-traded fund (ETF). The advantage of having an ETF at the core of an exchange is to guarantee liquidity by converting tokens in the ETF to liquidity whenever needed. This mechanism offers the flexibility necessary to make quick conversions at reasonable rates. Bancor is widely accepted as a reliable and trustworthy DEX in the crypto community.

Kyber Network is an Ethereum-based-protocol that enables instantaneous conversions by removing the order book. Kyber’s smart contracts include a pooling mechanism that ensures liquidity for swaps and does not require an order book to function. There is a lot of support for Kyber from Ethereum developers and their growing community.

AirSwap is a spoke of the ConsenSys mesh. It embraces the traditional order book structure but uses smart contracts to connect buyers with sellers. This familiar peer-to-peer model has been adapted to the needs of the crypto space by including a native token that must be held and locked up for market makers to place orders; this prevents front-running and allows for dark pooling.

Uniswap has been gaining popularity lately due to its unique structure. Users can contribute ERC-20 tokens to Uniswap’s liquidity pool in return for commission generated by exchange fees. This DEX lives on the Ethereum blockchain and uses smart contracts to connect buyers with the liquidity pool.

Radar Relay provides wallet-to-wallet token swaps by leveraging the involvement of relayers in their infrastructure. Relayers facilitate the transfer of funds but never have access to a user’s crypto. They are rewarded for their services with the native token ZRX. While the use of relayers distinguishes it from the other DEXs on this list, Radar Relay is still a decentralized service.

There are many other DEXs to choose from, including:

EtherDelta

SharkRelay

ERCdex

Ethex.Market

ETH2DAI

Token Store

WeiDEX

ETHfinex

Switcheo

DDEX

Forkdelta

and many more…

Which DEX is the best?

Each exchange has its own benefits — there is no one-size-fits-all DEX that is consistently the best option for every swap. Because prices vary drastically between exchanges, picking the right DEX can have a big impact on your revenue and your customers’ experience.

A quick look on DEXIndex shows price differences from as small as 0.25% to as big as 9.84%

Therefore, the best way to build on DEXs is to use a combination of the services available. Ideally, you’d integrate with multiple exchanges, but this takes a substantial amount of development time and can be very challenging. To solve this problem, use Totle.

Totle aggregates the top decentralized exchanges and determines the best price for every transaction you execute. By leveraging a suite of smart contracts, Totle operates as a non-custodial service with decentralized infrastructure. Additionally, the Totle API is easy to integrate with and offers a variety of services.

Get Started

To start using Totle, access the API here: Build with Totle

Easily convert tokens with Totle: Totle Swap

Follow us on Twitter, Facebook, Telegram, or Medium for the most up-to-date news on Totle.