The best decentralized exchanges on Cardano allow users to:
This article reviews the top three decentralized exchanges on Cardano and should help point investors in the right direction to greater rewards.
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.
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!
Traders looking to swap ADA can benefit by having:
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.
If you value anonymity online when it comes to trading, DEXes only require you to connect your personal wallet to start transacting.
Unlike centralized exchanges that might limit or delay withdrawals, you have ultimate control of your trades to do what you want, whenever you want.
Transaction fees on DEXes are typically competitive with CEXs but vary from platform to platform, but more on that below.
Depending on the exchange one uses, the benefits for users looking to provide liquidity can include:
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.
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.
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.
This works the same as the above examples, but just with earning ADA and is available on the Minswap and Wingrider DEXes.
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.
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.
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.
There are also a number of MILK pools you can consider staking MILK to in order to earn other project tokens.
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.
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.
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.
Minswap allows users that stake their liquidity pool (LP) tokens to earn MIN tokens as liquidity providers.
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.
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.