Crypto exchanges come in two flavors: decentralized exchanges (DEX), where assets are transferred onchain as designed, or centralized exchanges (CEX), where your assets are deposited under the control of someone else to enable convenient offchain trading.

Approximately 45% of all crypto trading happens off-chain through centralized exchanges, according to Chainalysis. Decentralized exchanges ensure you keep custody of your funds, enjoy transaction costs many times cheaper than CEX withdrawals, and access every token that exists. Of course, if you’re reading this you probably know why you need a DEX, but which DEX is best?

Let’s dive into the onchain world and compare DEXs like Uniswap with DEX aggregators like Matcha. Whether you're a veteran trader or just starting with decentralized finance (DeFi), this DEX comparison will assist you in making informed choices and optimizing your trades.

Decentralized exchanges and DEX aggregators

DEXs and DEX aggregators are the key platforms used for onchain crypto trading, each with distinct characteristics. DEXs use AMMs, Automated Market Makers, to process trades using tokens which are pooled together by multiple liquidity providers. DEX aggregators take this several steps further by comparing prices across many hundreds of AMMs, and also including Private Market Makers (PMMs), who compete to fill the trade. This broad market view makes DEX aggregators more competitive on pricing and token availability.

One way to think about the difference between DEXs and DEX aggregators is that DEXs are platforms for providing liquidity, while DEX aggregators are platforms for traders to access that liquidity. DEXs have made and continue to make significant advances that benefit liquidity providers such as concentrated deployment of liquidity, tokenization of pooled assets, and the ability to choose fee tiers, but they cannot compete with the routing, depth of liquidity, token availability, or price execution provided by DEX aggregators.   

Decentralized Exchanges (DEXs)

A decentralized exchange, or DEX, enables peer-to-peer crypto trading by using smart contracts as trustless intermediaries. DEX protocols are built on top of blockchain networks as a set of smart contracts that execute trades of one token to another, by using pooled liquidity provided by individual liquidity providers. Any time a pooled token is used to complete a trade, the token provider earns a fee as a reward. 

Uniswap, Camelot, PancakeSwap and Maverick are just a few examples of DEXs that have become essential decentralized markets within their respective ecosystems, powering billions of dollars of onchain trades daily and serving as a primary route for launching tokens by raising initial token liquidity.

DEXs are best for liquidity providers, DEX aggregators are best for traders

While most DEXs have a trading app on their own website, the underlying protocols and liquidity pools are built to be openly accessible, so they can be accessed through other apps without needing to pay the additional frontend fees, such as the 0.25% fee charged by Uniswap. This is how some DEX aggregators like Matcha let you trade crypto for free.

DEX aggregators

DEX aggregators connect liquidity pools from dozens, even hundreds of DEXs. By constantly sampling liquidity of each of these pools, they can simulate trade scenarios to calculate the optimal order routing that reduces onchain costs and gets you better prices than any single DEX is capable of. DEX aggregators also have the lowest crypto exchange fees of all trading platforms.

Each DEX aggregator has its own method for calculating these routes, and their own method of quoting prices. The pricing engine is the core component, as it needs to be able to sample liquidity every few milliseconds to detect changes across liquidity pools to get the most accurate prices, and then also calculate the most efficient route across them. 

At the most basic level, a DEX aggregator may simply compare DEXs and send your trade to the one that it determines will deliver a better price than the rest. But to ensure the best price every time, a DEX aggregator needs to be able to multiplex trades - split a single order across many different liquidity pools - and, in Matcha’s case, multihop - make trades using intermediary token pairs where liquidity is deepest. This naturally involves highly complex calculations, which is why only a handful of DEX aggregators have a pricing engine capable of providing the most competitive pricing.

With over 90% of all liquidity by trade volume across Ethereum, Base, Optimism and Arbitrum, Matcha’s combination of multihop and multiplex is incredibly powerful at finding the optimal route, and will update every few seconds to ensure it remains the most efficient. 

It is important to also note that not all DEXs or DEX aggregators will show you the actual price you will get once your trade is executed. Due to the complexity of calculating routes across the ever-changing markets, some exchanges choose instead to show you the most optimistic outcome and you will usually get significantly less than quoted.

Why DEX aggregators offer the best crypto trading experience

While both DEXs and aggregators have important roles to play, aggregators like Matcha offer many key advantages that result in a better overall experience, and the best value for money through more efficient use of available onchain liquidity:

More liquidity, more tokens: Aggregators are connected to far deeper liquidity as they can tap into multiple DEX AMMs as well as PMMs simultaneously. While some DEXs might have a monopoly on certain tokens, especially low market cap tokens, they may have limited or non-existent liquidity for others, resulting in high price impact or preventing you from getting the token you want. 

DEX aggregators are particularly beneficial for traders who want access to the widest selection of trading pairs and the best possible price on their trades. Matcha supports more than 6 million tokens, hundreds of times more than a single DEX can offer, and provides the deepest liquidity on the market by searching 120+ AMMs and PMMs, indexing any new token within 15 minutes of launch.

Optimal trade routing: Aggregators employ sophisticated algorithms to split trades across multiple DEXs to minimize the impact on a token’s market price. This results in better execution prices, especially for larger trades that would cause significant volatility on a single DEX. With the latest 0x v2 pricing engine, Matcha delivers the best trade price over 96% of the time on trades as large as $10 million compared to Uniswap.

‍Competitive pricing: By sampling liquidity across various platforms in real-time and comparing all available rates, both onchain and off, DEX aggregators will secure a better price for your trade than any single DEX, for every token.  

Exclusive liquidity sources: As mentioned above, Matcha combines offchain PMM liquidity from professional trading firms with onchain AMM liquidity from DEXs. This achieves unbeatable pricing by being able to leverage Request for Quote (RFQ) orders as well as rates available through public liquidity pools in a single trade. Not only do RFQ orders come with zero slippage, but Matcha can pick and choose the optimal ratio of public and private liquidity to execute your trade so you’re never limited to one method over the other.

Advanced trading features

As DEX aggregators are designed to give you a single access point to trade across all available liquidity, they may also provide additional features that bring quality of life benefits or introduce different trade types like bridging. A few of the advanced features Matcha provides are:

Cross chain swaps: Moving crypto between networks requires the use of a crypto bridge. This can be frustrating as they are usually only compatible with a handful of tokens, so you need to trade to a token like WETH or USDC, bridge across networks, and then trade again to the token you want. Cross-chain swaps combine Matcha’s DEX aggregation with a bridge aggregator to let you trade between tokens on different chains in one go.

Gasless trading: If you don’t have ETH or another native token to use as gas, most exchanges will not let you trade. Gasless swaps are a feature of Matcha Auto that uses metatransactions to process your trade offchain and lets you pay for transactions with the token you’re trading. This means you won’t end up with tokens stranded on a new network, and can save you money as you won’t have to pay unnecessary fees to top up gas or buy more ETH.

Limit orders: While most traders prefer to swap tokens using instant market orders, limit orders are a useful tool that allow you to set the price you want to pay for your crypto. If the market moves to your buy or sell price, your trade will execute. Limit orders on Matcha are free to create and can be left for up to 28 days before expiring.

What's the best DEX on Ethereum?

Ethereum is the most active chain and sees the largest volume, though some fast-growing layer-2 chains are catching up. Trading on Ethereum mainnet can be expensive due to gas prices and other factors which inflate costs including MEV. Your crypto trading platform should therefore be gas efficient, optimized to get you the most tokens for your money, prevent trade reverts, and ideally protect trades from MEV. Let’s compare Matcha to Uniswap, the most popular DEX by volume, to see how each performs.

Trading on Ethereum with Matcha

Matcha is a user-friendly, full-featured and the most cost-effective option for trading Ethereum onchain. Here are some of the reasons why Matcha is the best DEX for Ethereum:

• Zero-fee trading on 9 networks with pricing optimized by smart order routing and over 98% of liquidity coverage on Ethereum.
• Aggregates 120+ liquidity sources, covering both private market makers and DEXs including Uniswap.
• Over 6 million tokens indexed and quick discovery of brand new tokens within 15 minutes of launch on any DEX including Uniswap.
• Finds the best price on trades up to $10M and beyond over 96% of the time.
• Permit2 security with one-time allowances prevents token allowance exploits and eliminates the need to revoke token allowances.
• Gas-efficient smart contracts by 0x ensure you get excellent value even on smaller trades. 
• Avoid sandwich attacks and front-running with MEV protection.
• Gasless trading of ERC-20 tokens on 5 networks.
• Cross-chain swaps with bridge aggregation for direct token swaps across networks.
• Limit orders let you set the price you want to pay, with no cost to create.
• The lowest revert rates of any DEX reduces failed trades and ensures trades go through when you need them to. 
• Smart wallet support allows new users to create a wallet in under 10 seconds, secured through biometrics or passkeys.
• Support for trading LP tokens, staking tokens, and NFT derivatives like ERC404.

The most essential features of any DEX are pricing and speed. Matcha is the leading onchain exchange in both aspects, beating other leading aggregators such as 1inch on pricing in over 90% of trades in terms of final executed amount, and delivering next-block execution for a fraction of the costs of other platforms through Matcha Auto. Serious traders use Matcha because it is built for performance at any size, without charging any fees to access liquidity and best-in-class routing.

Trading on Ethereum with Uniswap

Uniswap remains the most popular DEX on Ethereum in terms of volume, and is the place where most new tokens are launched. Uniswap protocol is currently on version 3, with Uniswap v4 expected in Q4 2024. While this is expected to bring significant improvements to liquidity providers, the overall trading experience is not likely to change. Some of the reasons Uniswap remains the most popular DEX include:

• Highest liquidity among non-aggregator DEX platforms.
• Most popular platform for new token launches.
• Sidebar wallet extension with onramp for credit card purchases.
• Permit2 with time-based allowances reduces the likelihood of allowance exploits.

Uniswap's main strengths lie in its relatively deep liquidity and that it makes it easy to launch new tokens. However, Uniswap charges a 0.25% fee on every swap, meaning you will always be better off swapping on Matcha, even if using Uniswap’s liquidity.

What is the best DEX for L2 and EVM Chains?

Layer-2 solutions (L2s) such as Arbitrum, Optimism and Base have become hugely popular among traders as they offer lower fees while providing most of the same security benefits as Ethereum mainnet. But for the most competitive pricing, you still need an exchange that has deep liquidity and efficient routing.

Trading on L2s and EVM chains with Matcha

Being able to trade on and across Layer-2 blockchains quickly and cheaply is essential if you want to find the next big opportunity in crypto. Matcha again offers the most comprehensive toolkit for multichain trading, with:

• Support for 7 chains, including the largest EVM-compatible networks like Optimism, Arbitrum, Polygon, Base, BSC and Avalanche.
• Access to over 6 million tokens, with approximately 10,000 brand new tokens added every day.
• Gasless trading on 5 chains, allowing you to trade tokens on L2s without needing to bridge ETH across first.
• Over 97% liquidity coverage on Base, Optimism, and Arbitrum.
• Cross-chain functionality gives you unlimited flexibility and lets you easily manage your entire EVM portfolio, enables cheap gas top-ups, and free USDC transfers using Circle's CCTP.
• Limit orders on Polygon and BSC.

Our strengths are the wide token selection, gasless trading options, and cross-chain capabilities. It’s great for you as a user when you want to find a new token launched on any L2, access the deepest liquidity for optimal trades, want to trade across chains swiftly, and more. In short, it’s an upgrade from the normal DEX. 

Best DEX for trading on L2s and EVM chains 

Uniswap remains the largest DEX by volume on most L2 chains, though there is significant competition from more specialized and chain-specific DEXs. While many of the same points as mentioned in the previous section apply to Uniswap on the 10 chains it supports, let’s take a closer look at some of the competitors on Arbitrum, Base and Optimism for a more holistic view of the L2 DEX space. 

Best Arbitrum DEX

Camelot is the largest Arbitrum-native DEX, with $110M in total value locked (TVL). The latest version, Camelot v3, allows liquidity providers to provide concentrated liquidity within a set price range, enabling more capital-efficient use of liquidity and ensuring deeper liquidity for traders within the price range. Camelot incentivizes liquidity providers through its GRAIL token. 

Camelot quotes an optimal price and a minimum price received, meaning you may receive less than you expect. On a trade of 10 ETH to USDC, Camelot handles price impact well at 0.16%, but suffers slightly with 0.52% at the higher amounts of 100 ETH. This larger trade on Matcha would result in just 0.03% price impact. 

Camelot v3 is aggregated in Matcha, ensuring you can access this concentrated liquidity in any Arbitrum trade, and automatically have it combined with other sources like Uniswap.

Best Optimism DEX

Velodrome is a DEX designed to serve the broader Optimism Superchain ecosystem, with around $100M in TVL. It achieves strong performance on both stablecoin swaps and more volatile pairs with similar liquidity provider features as Uniswap v2. Velodrome LPs are incentivized with VELO token rewards.  

Velodrome quotes an optimal price and a minimum price received, meaning you may receive less than you expect. On a trade of 10 ETH to USDC, Velodrome shows around 1.36% price impact, rising to 1.87% at the higher amount of 100 ETH. On Matcha, this larger trade would incur just 0.11% price impact.

Velodrome v2 is aggregated in Matcha, ensuring you can access this liquidity in any Optimism trade, and automatically have it combined with other sources like Uniswap.

Best Base DEX 

Base is a relatively new chain and the DEX landscape is still broadly competitive. Several native DEXs have seen significant popularity on Base: Aerodrome, BaseSwap and Maverick.

Aerodrome is essentially a fork of Velodrome with $559M TVL, and shares the same liquidity model described above. Notably, Aerodrome TVL tripled in March this year, and became the second liquidity pool for Farcaster’s Degen token shortly after, helping further elevate it above the competing Base DEXs. A 10 ETH to USDC trade on Aerodrome would result in around 0.57% price impact and a 100 ETH trade would cause a very similar 0.59% price impact. The difference between the quoted price and the minimum received, due to user-configurable slippage, is another 1% in both cases.

BaseSwap is a concentrated liquidity AMM with $5.7M TVL. It displays 65% and 1800% price impact on a 10 ETH and 100 ETH trade to USDC, though the quote shows 0.9% and 18% difference. In any case, Matcha would deliver just 0.07% price impact on the same trade. 

Maverick is a Dynamic Distribution AMM with $4.6M TVL that allows liquidity providers to automate liquidity provision to keep their pooled liquidity concentrated within a narrow, efficient range as prices move. A 10 ETH to USDC trade shows 3% price impact, while 100 ETH shows 724%, though again the quoted amount is somewhat less severe.

With liquidity fragmented across the Base ecosystem, the best DEX for trading on Base is a DEX aggregator like Matcha, where you can tap into Maverick, BaseSwap, Aerodrome and more to get the most efficient route without creating large price impact drawdowns, and enjoy a more comprehensive suite of trading features that make trading fast and great value across multiple EVM chains. 

What’s the best DEX for Bitcoin?

Bitcoin is the first and most popular cryptocurrency in the space. However, there are challenges when trading as it lacks the smart contract innovation that has made Ethereum and EVM chains so popular. Although peer-to-peer solutions exist, there are also options available for those looking to trade BTC in a decentralized manner, by bridging it to EVM chains where it is wrapped as an ERC-20 token, WBTC (Wrapped Bitcoin).

Using WBTC for Bitcoin in DeFi

Wrapped Bitcoin (WBTC) allows Bitcoin holders to participate in onchain DeFi activities like trading on a DEX.

How to wrap BTC to WBTC:

1. Choose a reputable wrapping service.
2. Send your BTC to the provided address.
3. Receive WBTC on the Ethereum network.

How to unwrap WBTC to BTC:

1. Initiate an unwrapping request through the wrapping service.
2. Send your WBTC to the provided Ethereum address.
3. Receive BTC at your specified Bitcoin address.

Once it is wrapped as an ERC-20, you can then trade WBTC on most EVM DEXs and DEX aggregators including Matcha and Uniswap, and can even send it across chains using bridges or cross-chain swaps. 

Bitcoin Peer-to-Peer Options

For those preferring to trade Bitcoin directly, peer-to-peer platforms offer decentralized trading options. While these may provide a different depth of liquidity or ease of use than DEXs, they allow for trading BTC without intermediaries. Popular choices include Bisq, HodlHodl, and Vexl which each facilitate peer-to-peer Bitcoin trading with various payment methods.

What DEX should you choose?

As a trader, it can be difficult to see through the many different DEXs, meaning you may simply default to Uniswap or another DEX you’ve grown comfortable with, and don’t realize that there are other exchanges designed to make your trades perform better: DEX aggregators. 

DEXs are first and foremost a platform designed to pool and manage liquidity. If the DEX you use doesn’t have a pool for the token you want, or not enough liquidity in a pool for your trade size, you’re going to end up getting a bad deal. DEX aggregators let you surf through all available liquidity across multiple blockchains, and always get the most tokens for your money. You may not worry much about a couple of percentage points in price impact or fees here and there, but it can quickly add up to a small fortune, especially when your trades get sandwiched or you keep getting the minimum trade amount instead of your quoted price. 

Trade smarter. Switch to Matcha to trade for free, and enjoy the broadest token availability, low revert rates, gasless trades, protection from MEV and sandwich attacks, and all the other benefits we’ve listed above. Not only will you save money, but you will also be able to seize every opportunity that comes your way, without having to hunt across DEXs to find the right place to trade. Try Matcha today.