Ethereum is the leading smart contract blockchain and there are other major blockchains following Ethereum in its path. Solana, Polkadot, Avalanche blockchains are smart contract compatible. Developers can create a decentralized app on those blockchains and those apps will run on the blockchain without a pre-determined center. Computers contributing to the blockchain computing power will be randomly working as a host for the apps on the blockchain and we call them decentralized apps.
One of the most preferred ways to utilize decentralized apps is creating cryptocurrency exchange applications. They are called Decentralized Exchanges, in short DEX. Decentralized Exchanges provide a platform where users can exchange and trade cryptocurrencies on the native blockchain.
Decentralized Exchanges allow users to trade anonymously without KYC requirements and ID checks. Some Dexes are working on creating alternative DEXes for specific countries and making their platforms compatible with local laws. For example, some of the DEXes are allowed in the United States only with their US version, because of money laundering and tax issues. US citizens are required to report their earnings to IRS and pay tax for their crypto income.
Decentralized Exchanges also localize their apps on different blockchains. For example, UNIswap has version 1, version 2, version 3. Versions are changing by the blockchain they operate.
Uniswap is the largest decentralized exchange. Uniswap is a decentralized finance protocol where tokens and coins can be traded and exchanged. The Protocol has its native token UNI. Uniswap is run by a centralized company but the platform is governed by UNI token holders. UNI tokens are governance tokens on the platform and holders can vote on important decisions and development. Uniswap was created in 2018 by Hayden Adams who was a mechanical engineer at Siemens.
Pancakeswap is the second biggest DEX after Uniswap. The key difference is the underlying blockchain where they are built. Pancakeswap is built on Binance Smart Chain and it is faster and cheaper compared to its opponents. CAKE is the platform's native token and is used for the governance of the platform. Pancakeswap has more users than Uniswap but is still behind by the trading volume.
DODO is a relatively new DEX but it is still among the biggest decentralized exchanges. DODO has a different algorithm compared to opponents. Most of the DEXes use AMM (automated market maker), but DODO uses PMM (Proactive Market Marker). DODO DEX is built on Ethereum and Binance Smart Chain blockchains. DODO tokens are used as utility and governance tokens on the platform. A high supply of DODO tokens suppresses the price.
Pangolin is a community-driven AMM decentralized exchange built on Avalanche blockchain. Ethereum and Avalanche coins and tokens can be traded and exchanged on the platform. PNG tokens are the platform’s governance and utility tokens. Pangolin allows users to trade Ethereum tokens with fast and cheap transactions thanks to Avalanche blockchain’s improved consensus concept. PNG holders can vote on important decisions and development on the platform.
DYDX is an innovative margin trading platform. The platform is decentralized and built on the Ethereum blockchain. Major coins such as BTC, ETH, SOL, DOT can be traded with margin options. DYDX is a governance and utility token on the platform. DYDX is a unique DEX with margin features. The platform is built on Ethereum with a layer-2 solution which allows users to benefit from lower costs on transactions.
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