Best Decentralized Exchanges [2023]

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A Decentralized Exchange, or DEX, is where investors can trade digital assets without the need for intermediaries. The advent and proliferation of DEX technology represents a natural progression of blockchain principles, including decentralization and the attempt to remove intermediaries. Simply put, DEXes are blockchain-based applications that coordinate large-scale trading of crypto assets between users.

'Not your keys, Not your coins' is a famous adage amongst the crypto community that digs at the vital issue of custody, or lack of it within the sphere. DEXes play an essential role for cryptocurrency owners who want to maintain complete control of their assets while also partaking in trading.

What is a Decentralized Exchange?

Decentralized exchanges sit at the centre of DeFi (decentralized finance) and are the trading houses of this permissionless ecosystem. Nansen provides a clear and easy-to-understand broader discussion of DeFi here: What is DeFi and an overview of other traditional financial services mimicked by DeFi, including DeFi Lending.   

Decentralized exchanges require two types of people to operate successfully: traders and liquidity providers. Traders utilize the platform to make swaps, and investors provide liquidity to the DEX in exchange for trading fees. Traders interact with liquidity pools, the aggregated funds of investors locked in smart contracts, and investors receive LP (liquidity provider) tokens to represent their stake locked in the smart contracts and to track their fee earnings. 

How Does it Differ from a Centralized Exchange?

DEXes represent the ethos of crypto assets more faithfully than centralized exchanges, or CEXes. The central difference between the two in terms of operating is the trading model used. CEXes use an order book, whereas DEXes use the AMM (Automated Market Maker) trading model. 

In brief terms, a centralized exchange matches buy and sell orders from market participants. In contrast, when users swap on a DEX, they interact with a smart contract that adjusts the price relationship between two or more assets after every trade, instead of being matched with another trader to find a price. Liquidity pools replace the traditional market of buyers and sellers, and the AMM model is a unique feature of DeFi, allowing swaps at any time without an intermediary.

Another central difference is DEX's permissionless nature which means anyone can utilize them. Additionally, there is no mandated KYC (Know Your Customer) procedure, and thus investors who do not want to disclose their identity favour DEXes.

Why do People Use Them?

People who use DEXes are driven primarily by financial incentives. A small subsect of the population uses them solely out of curiosity or on ideological lines. Still, the vast majority of market participants within DeFi are motivated by financial opportunities, of which there is no shortage on DEXes.

DEXes offer investors a greater variety of crypto projects as anyone can list a token on a DEX; the only prerequisite is users willing to provide liquidity. Tokens must go through a long process before being listed on a centralized exchange, and thus investors who want to join at an earlier stage utilize DEXes. 

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The anonymity factor is another major draw with just a non-custodial wallet and funds required to participate. 

Specific traders use decentralized exchanges for arbitrage opportunities with the constant introduction of new assets and the rapid pace of development in the sphere. It represents a paradise for more experienced traders. Further information on arbitrage can be found here

Finally, the most significant draw for investors is the possibility of generating yield. DeFi and decentralized exchanges boomed during the 2020 DeFi Summer as market participants locked up funds in smart contracts. The umbrella term “yield farming” is used to denote using existing assets to generate further assets within DeFi. Platforms offering users additional liquidity mining rewards on top of exchange fees is a popular form of yield farming, and the proliferation of yield farming has driven the growth and popularity of decentralized exchanges.  

How Secure are Decentralized Exchanges?

On DEXes, investors interact with smart contracts and provided the smart contract is well designed, decentralized exchanges can be highly secure. Relying on non-custodial ownership, traders and investors retain full ownership of their assets and thus face no risk of asset loss through traditional breaches.

However, decentralized exchanges are not without risk, but the risk primarily comes from human error. Due to their permissionless nature and lack of a centralized authority, the recovery ability of DEXes is limited. Therefore, market participants must always do their due diligence before interacting with these platforms. The other central risk is that of transactions being front-run. Because mining pools receive a preview of transactions before validating them, there is a possibility for market manipulation, which is why users are encouraged to use low slippage fees when making trades.

Best Decentralized Exchanges


Uniswap is the predominant decentralized exchange on the Ethereum network and the largest DEX for Ethereum-based ERC-20 tokens in the entire crypto sphere. Uniswap was an early pioneer of the AMM model and still enjoys first mover advantage. At the time of writing, Curve Finance, the stablecoin-centric DEX, has eclipsed Uniswap in terms of TVL (Total Value Locked), but Uniswap continues to dominate in volume. In a bull market cycle, Uniswap is the largest decentralized exchange ranked via liquidity, and Uniswap acted as the blueprint for many subsequent DEXes. 

Uniswap boasts liquidity and trading volume that rivals several centralized exchanges and offers the largest and most secure Ethereum paired liquidity pools. 


PancakeSwap launched anonymously in 2020. This food-themed decentralized exchange has become a favourite amongst investors as the leading decentralized exchange on the BSC (Binance Smart Chain), which offers lower transaction costs than the Ethereum network making it highly popular amongst less well-capitalized investors. 

PancakeSwap offers hundreds of yield-generating opportunities. It distributes its native token, CAKE, as an incentive to users who provide liquidity, and CAKE can be single-staked on the DEX to earn further yield. PancakeSwap possesses incredible liquidity and has the largest number of daily users.

Curve Finance

Curve Finance uses a specialized AMM model that focuses primarily on stablecoins. It offers the most efficient swaps and the lowest slippage by focusing on liquidity pools constituted of assets meant to have a similar price relationship, such as USDT and USDC – two assets pegged to the US dollar. 

Curve avoids market volatility and is the best place for investors who want to generate yield on stable assets. Rewards for providing liquidity come in the form of the governance token CRV, which enables market participants to vote on the distribution of further CRV. This famously led to the Curve Wars – a fight amongst DeFi protocols to secure a portion of Curve's liquidity and gain a greater percentage of the CRV tokens awarded to their pool. 

Curve is best for users interested in swapping like-assets, and liquidity providers looking to generate a return on the same assets. 


The premier decentralized exchange within the Fantom ecosystem, SpookySwap, aims more toward DeFi enthusiasts than the other DEXes on this list. SpookySwap features a bridge for cross-chain transactions, no deposit fees for its liquidity pools, and allows users to receive enhanced yields by staking the native token BOO. 

SpookySwap features some of the best yield farming pools within crypto and distinguishes itself by offering limit orders and standard token swaps – upgrades on normal Uniswap v2 fork functionality. 


Technically a decentralized exchange aggregator, 1inch offers some of the best swap efficiency for traders. It works by checking the prices of multiple other DEXes and routing market participants' trades through the most efficient route. For active traders, 1inch is a brilliant tool that ensures they get the best prices for their chosen token.

Getting Started with DEXes

To begin trading tokens on decentralized exchanges, market participants only require two things: a non-custodial wallet and funds. MetaMask, a browser extension, is the most popular non-custodial wallet and can be downloaded within minutes. Funding the wallet requires the transfer of digital assets on the appropriate chain to the new wallet address. With these two steps, anyone can visit a DEX frontend and begin to trade tokens on decentralized exchanges. 


Decentralized exchanges are the permissionless liquidity hubs of DeFi. They allow digital asset owners to generate passive income and trade a broad range of tokens. Blockchain analytics companies like Nansen help investors gain a deeper understanding of current market trends and make better trades on decentralized exchanges by following real-time data. 

Want to track how top-performing Smart Money addresses use DEXes? Sign up for a Nansen plan today!


The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.

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