The Best Decentralized Exchanges on Cardano

The best decentralized exchanges on Cardano allow users to:

  • Swap ADA for Cardano native tokens
  • Earn passive income by staking tokens
  • Provide liquidity to facilitate trades and collect transaction fees
  • Find up and coming Cardano native tokens to invest in
  • And more!

This article reviews the top three decentralized exchanges on Cardano and should help point investors in the right direction to greater rewards. 

What is A Decentralized Exchange?

Decentralized exchanges (DEXes) differ from centralized exchanges (CEXs) in that they don’t store money for users. 

Instead, DEXes facilitate peer-to-peer lending through the use of smart contracts. This way, no funds ever pass through the hands of an intermediary or third party like with a centralized platform, giving users greater control over their investments and wallets.

Benefits of A Decentralized Exchange

Well, there are pros and cons for all types of exchanges and investing comes with certain risks, on any platform, and in any currency...  

But, with decentralized exchanges there are plenty of benefits for traders and liquidity providers alike!

Buying and selling

Buying and selling on DEXes

Traders looking to swap ADA can benefit by having:

  • Access to a wider selection of tokens since most small cap tokens aren’t listed on centralized exchanges

Diversify your portfolio by investing in tokens found nowhere else and that have potential to see massive returns before they get picked up by centralized exchanges. 

  • Greater privacy since you don’t need to go through KYC

If you value anonymity online when it comes to trading, DEXes only require you to connect your personal wallet to start transacting.

  • Immediate access to your tokens

Unlike centralized exchanges that might limit or delay withdrawals, you have ultimate control of your trades to do what you want, whenever you want.

  • Competitive transaction fees

Transaction fees on DEXes are typically competitive with CEXs but vary from platform to platform, but more on that below.

Providing Liquidity

Providing Liquidity on DEXes

Depending on the exchange one uses, the benefits for users looking to provide liquidity can include:

  • Provide liquidity to facilitate trades and collect transaction fees

By providing liquidity you contribute to the decentralized economy and are eligible to collect transaction fees based on the amount of tokens you’ve put up.

  • Farm (Earn) DEX tokens by staking liquidity pool (LP) tokens — depends on the promotion for each platform

A liquidity pool contains two assets or tokens a user can swap between. By depositing the pair of tokens you are providing liquidity to a pool to enable trade. For this, you’re given LP tokens that denote your share of the pool and will allow you to retrieve your deposit as well as any interest gained. If liquidity providers stake these tokens, most DEXes reward them with their own exchange token in order to lock in liquidity on their platform. It’s a great way for liquidity providers to make some additional income as those tokens can also easily be sold for other tokens on the DEX.

  • Earn Project tokens when you stake their specific liquidity pool token — a few promoted tokens on each platform

Some DEXes also give bonus project tokens to specific liquidity pools. For example, if you stake your NFT Maker token on Minswap, not only will you earn Min tokens but you also will earn additional NFT Maker tokens as well. 

  • Receive ADA staking rewards on the ADA portion of the liquidity pool 

This works the same as the above examples, but just with earning ADA and is available on the Minswap and Wingrider DEXes.

  • Find up-and-coming Cardano native tokens to invest in

There are plenty of new tokens for you to invest in that can’t be found on centralized exchanges. Providing liquidity for these projects often promises very high APY(average percentage yield) returns, but do come with risks. 

Read more about the benefits and drawbacks of centralized exchanges vs decentralized exchanges!

Top 3 DEXes on Cardano

Let’s jump right in to reviewing the best decentralized exchanges on Cardano. 

Whilst there are a few up and coming platforms, we’re covering the top three to swing you in the right direction for your next decentralized trade.

1. MuesliSwap

MuesliSwap was the first DEX that went live on Cardano, launching at the end of November 2021. 

This exchange allows you to swap, stake and earn MILK (MuesliSwap’s utility and governance token) based on the number of ADA + MILK tokens that you stake or “lock-up” for a certain period of time.

MuesliSwap Liquidity Pools

MuesliSwap Liquidity Pools

There are also a number of MILK pools you can consider staking MILK to in order to earn other project tokens.

MILK Pools on MuesliSwap

The platform has also recently minted an NFT series called Hungry Cow that, if staked, helps its owners boost rewards for one yield farming position they’re a part of. There is also an NFT marketplace that is in the works.

  • What’s cool about MuesliSwap: You can get familiar with how to use the DEX without spending any real money through their publicly accessible development version
  • What you’ll need: You need a Cardano wallet that supports dApps. Check out our article on the top ten cryptocurrency wallets for Cardano HODLers and artists.
  • Token: With 10 million in supply and about half currently in circulation, MILK gives holders access to trading, voting and staking on the platform. You will also enjoy discounted trading fees (if you hold at least 100 MILK in your wallet).
  • Trading/Swapping fees: All trades up to 120 ADA are free from any fee charged by MuesliSwap. Only a small fee of 0.95 ADA is taken to cover the network costs and to incentivize decentralized matchmakers when matching a transaction. Holders of WorldMobileToken (WMT) will also enjoy reduced fees as per the breakdown below.
Trading fees on Muesliwap
Swapping on MuesliSwap

Swapping fees on MuesliSwap

  • What makes them different: Trading works on both an order book model with price charts and an AMM, unlike the other two decentralized exchanges we review in this article.
  • Total value locked:  $5.1 million.

Start trading our $Monet token on MuesliSwap here!

2. SundaeSwap

SundaeSwap is a high-value decentralized exchange that operates on the Cardano blockchain. It is a scalable exchange protocol with automatic liquidity provision. 

The exchange allows users to swap, stake, lend and borrow tokens and has fast become a popular decentralized platform for Cardano lovers.

Here’s an example when providing liquidity for the Monet/ADA LP.

Providing liquidity on Sundaeswap

Providing liquidity on Sundaeswap

Providing liquidity on Sundaeswap

It’s important to mention that with Sundaeswap when you do withdraw your liquidity you will not be receive any ADA staking rewards on the ADA portionstaked to the pool. 

Other DEXes like Minswap (see below) provide ADA rewards for the ADA portion as well as token rewards for the token portion.

  • What’s cool about SundaeSwap: Liquidity pools allow users to earn trading fees as a reward for providing liquidity. Their liquidity pools rely on an automated market maker (AMM), which reduces the risk of abuse in the market, and brings remarkable efficiency on returns. 
  • What you’ll need: As with all trades on exchanges, you’ll need your own wallet, with enough ADA to cover the blockchain’s transaction fees.
  • Token: SundaeSwap’s native utility token is called SUNDAE. Two billion SUNDAE tokens are to be minted and made available slowly over a period of time, as the protocol matures, and users of the DEX are also rewarded with this token.
  • Trading/Swapping fees: Users need ADA to cover:
  • The blockchain’s transaction fee.
  • A liquidity provider fee: Depending on which liquidity pool your swap is going through, there are three tiers of pool fees of 1%, 0.3%, and 0.1%.
  • A Scooper processing fee’: This is charged to cover the cost of a Scoopers’ time for submitting your order to the blockchain.

Swapping on Sundaeswap

  • What makes them special: With SUNDAE, users have voting power within the SundaeSwap Decentralized Autonomous Organization (DAO). This means, you are part of what shapes the future of the protocol, on-chain.
  • Total value locked: $26 million.

Deposit ADA and $Monet in SundaeSwap’s liquidity pool to earn your share of rewards here!

3. Minswap

The self-titled “sassy undercat” of Cardano’s DeFi protocols, Minswap is an innovative and proudly community-focused DEX on Cardano that keeps creating novel initiatives. 

Minswap allows users that stake their liquidity pool (LP) tokens to earn MIN tokens as liquidity providers.

LP Farm on Minswap

APR of farm on Minswap

In the example above, you’ll see that liquidity providers will earn both MIN and ADA at the APR (annual percentage rate) detailed.

Minswap also has a mobile-native wallet and positions itself as the most mobile-friendly decentralized exchange on the Cardano blockchain.

  • What’s cool about Minswap: Like SundaeSwap, they have Automated Market Maker (AMM) functionality. The DEX is also currently developing an ERC-20 Converter that will allow users to trade Ethereum tokens at reduced fees.
  • What you’ll need: You’ll need your own wallet with Cardano currency that is connected to Minswap’s DEX. Minswap’s DEX supports CCVault, Nami, Flint, Typhon, and Gero Wallet, with Yoroi support in the works.
  • Token: Minswap’s token protocol has a max supply of 5 billion MIN. If you hold a MIN token, you hold a democratic vote on protocol changes. 
  • Trading/Swapping fees: A liquidity provider fee of 0.3% needs to be paid to those who are providing liquidity when users make use of their Zap feature. This feature allows you to easily provide liquidity when you only have one token of an LP pair.

Provide liquidity with one token pair using Minswap's Zap

  • What makes them special: The Minswap Launch Bowl helps other projects to bootstrap their liquidity on Minswap.
  • Total value locked: $53.9 million.

Closing Thoughts

When it comes to choosing the best decentralized exchange on Cardano for you, it ultimately depends on what you’re looking for. 

If you want compelling innovation, democracy and a leg up into listing your own token on the blockchain, then Minswap can work for you..

If you prefer an alternative AMM exchange that has a good reputation on Cardano, then SundaeSwap might be the DEX you’re looking for. 

If you want to trade cryptocurrency on an affordable order book DEX that might be more familiar to traders that use centralized exchanges, then give MuesliSwap a go.

Whatever your route, we are confident you will find the right DEX on Cardano for your trading needs.