New Crop of DEXs Promise Lower Fees and More Pricing Transparency

Upshot: Uniswap and PancakeSwap have become household names in decentralized exchanges but a new crop of platforms are coming online with the promise of lower fees and more pricing transparency.

Despite Uniswap and PancakeSwap remaining the most popular decentralized exchanges (DEXs), several new platforms are emerging with lower fees and greater pricing transparency.

With gas prices skyrocketing in the first half of 2021, it's crucial to explore your options when trading on DEXs. These exchanges aim to provide the same scale as centralized alternatives but without a central layer of ownership executing trades.

While Uniswap spearheaded the initial wave of DEX enthusiasm, its popularity is waning due to high gas fees and several competitors using aggregation or new lower-fee networks to differentiate and attract users. We'll examine some of the more well-known instances of these DEXs and compare them using some of their more critical metrics.

What's driving this change in the Decentralized Exchange space?

DEX Aggregators - DEX aggregators search liquidity from different DEXs and offer users better token swap rates than they could get on any single DEX. They can optimize slippage, swap fees, and token prices, often delivering a better rate for users.

They also allow users to target maximum return versus lowest gas fees for any transaction. When you add in the ability to compare pricing in real time between a huge number of DEXs, the opportunities for arbitrage trading are plentiful.

Binance Smart Chain (BSC) - Binance Smart Chain is a blockchain network built for running smart contract-based applications, rivalling the common ETH network. BSC runs parallel to Binance's Binance Chain (BC), allowing users to get the best of both worlds: high transaction capacity of Binance Chain and the smart contract functionality of BSC.

BSC has gained incredible traction in 2021 thanks to Ethereum's congestion and gas fee issues. This has seen developers and staking investors begin to look for other options. The BSC community made the network even more appetizing to new users by lowering its gas fees from 15 Gwei, down to 10 Gwei in an effort to counter Binance Coin's (BNB) huge price jump in February.

Taking a closer look at cross section of DEX options

Uniswap - Uniswap is a leading decentralized crypto exchange that runs on the Ethereum blockchain. One of the founding fathers of the DEX ecosystem, this exchange continues to

be popular; despite the high gas fees being found across the ETH network.

Uniswap incentivizes users trading on the exchange to become liquidity providers (LPs): Uniswap users pool their money together to create a fund which is used to execute all trades that take place on the platform.

Market Share: 16%

Fees: 0.3%

Avg. gas fees: $11.38

Trading Pairs: 856

PancakeSwap - PancakeSwap is a decentralized exchange built across Binance Smart Chain, providing a fast and inexpensive alternative to Ethereum. Similar to Uniswap, PancakeSwap allows users to swap between cryptocurrency assets by tapping into user-generated liquidity pools.

As Pancakeswap runs on the Binance Smart Contract network, users see lower transaction fees, alongside significantly lower gas fees. This has led to Pancakeswap rapidly moving up into second spot behind Uniswap as the leading decentralized exchange. It has also seen a massive rise in new projects seeking to ride on its coat tails, resulting in a significant number of potential trading pairs when providing liquidity.

Market Share: 8%

Fees: 0.25%

Avg. gas fees: $0.05

Trading pairs: 15,265

SushiSwap - SushiSwap is a popular Uniswap fork, built on the Ethereum network. As with Uniswap, it allows users to buy tokens and add to liquidity pools to earn yields in the form of trading fees and SUSHI tokens.

As with many decentralized exchanges, Sushiswap provided leading APY rates at launch for it's farming and staking pools, incentivizing Uniswap users across in droves to make the most of these offers.

Market Share: 5%

Fees: 0.30%

Avg. gas fees: $9.98

Trading pairs: 496

1inch - 1inch collects and measures liquidity across numerous liquidity pools, trading platforms, and exchanges to find the best trade possible. By giving users the ability to access the entire DeFi marketplace, 1Inch helps to reduce fees and slippage for users, whilst providing far greater visibility of market positions than any single DEX.

Aggregation platforms such as 1Ince provide great opportunities for arbitrage; by finding pricing differences between multiple exchanges and generating profit margins by trading these differences. While excellent for finding individual tokens, the yield farming elements popularized on DEXs are more limited, and can be very pricey based on the number of transaction fees needed to be completed.

Market Share: 3%

Fees: Varies based on trading

Avg. gas fees: Varies based on trading

Trading pairs:

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