Choosing a DeFi-Friendly Crypto Exchange

DeFi, or decentralized finance is a $70 billion independent financial services industry. The DeFi ecosystem includes decentralized exchanges (DEXs), coins, insurance and loan companies, wallets, and many other projects. The core value of DeFi is independence from a centralized entity like a corporation or government, which brings the financial power back to the people.

What is DeFi?

Understanding decentralized finance can be challenging for those who are not familiar with the technology and the terminology used to describe it. Comparing it to a traditional bank is the easiest way to explain it. When you deposit money into your account, you are giving it to the bank. This is a custodial service which means the bank has control over your assets. The financial institution can freeze a transaction or the entire account if required to do so by law or internal policy. By contrast, DeFi's non-custodial services involve financial transactions, but they do not own or control your funds There are also some centralized exchanges (CEXs) that allow users to invest in DeFi projects

DeFi products are fueled by crypto. The most important first step when getting into the DeFi market is finding a crypto exchange that allows you to buy and sell crypto assets as well as provide user support and security features. Potential investors have a number of options to choose from. We selected the most trusted and reputable platforms that offer quality service to their users.

Uniswap

Uniswap is one of the most popular DEXs. Based on the Ethereum network, it allows users to swap ERC-20 tokens. The platform supports over 5,000 tokens, including ETH, DAI, USDT, and USDC. Since Bitcoin is incompatible with the ERC standards, it is not available.

The advantages of Uniswap over large centralized exchanges are increased privacy and ease of use. To start trading, you need to have a wallet such as MetaMask that will be used for the transactions. After your wallet is connected to the platform, you can start trading without signing up or undergoing KYC. The exchange can be accessed directly through a web browser.

Uniswap charges a fee of 0.3% per transaction which is used to maintain the platform’s liquidity reserves.

The Uniswap platform is highly functional and free from the weaknesses commonly found on CEXs, such as having too many steps to complete before transacting. The key is to remember that since it's a decentralized entity, users are 100% responsible for their funds. There is no asset approval process on the DEX, so users need to be careful with their investments.

ChangeNOW

ChangeNOW is a crypto exchange platform that has a wide selection of cryptocurrencies and fiat assets that traders can easily exchange. Almost instant exchanges are completed without signup, with the user simply having to provide their wallet address to receive the funds.

Available on iOS and Android, ChangeNOW supports about 400 crypto and 60 fiat currencies. This is one of the crypto exchange platforms that makes trading DeFi coins a breeze.

Network fees are already included in the exchange rate. It will vary depending on the assets that are being swapped and the type of rate chosen but the estimate is always provided before the exchange. Other NOW products that can also be useful to crypto traders include portfolio tracker NOWTracker, NOW Crypto Wallet, NOWPayments, and NOWNodes.

ChangeNOW is a good option for crypto traders who would like access to fiat currencies while also having a wide portfolio of crypto assets at their disposal. This is also the platform for those who have concerns about privacy and security since this is a non-custodial service that doesn’t require KYC.

eToro

Founded in 2017, eToro is a pioneer among social trading platforms.. Through a social network, investors can share their own trades and copy the strategy of successful traders. While eToro is a centralized exchange, it allows users to invest in 55+ cryptocurrencies including DeFi coins like AAVE, ATOM, and MANA.

Trading fees on eToro are based on the current spread and may vary between 0.75% and 2.9%. The platform provides a free digital wallet that can be used to store funds. It’s important to note that the conversion between fiat and cryptocurrencies is done with a 5% fee which can be costly for some users.

Users in 140 countries worldwide can access the platform on iOS and Android. This platform is a great tool for investors in the U.S., Europe, and Australia, which have stricter crypto regulations. Copying other transactions could be useful for those just getting to know the industry and not having a defined strategy yet.

Robinhood

Robinhood is another trading platform that has integration for cryptocurrencies. There is an iOS, Android, and web version of this exchange. Currently, it only supports 7 major coins, including Bitcoin, Ethereum, and Litecoin, with plans to add more in the future. If you want to invest in cryptos as well as trade traditional assets like stocks, options, and gold, this exchange is a good option.

The advantage of Robinhood is that crypto transactions, including deposits and withdrawals, are not subject to commissions or fees. The exchange offers services only in the United States, however. A KYC process is used to verify a residential address.

Therefore, the Robinhood exchange is best for traders from the United States who dabble in crypto and also invest in traditional financial assets. Additionally, they can use other features like cash management and wire transfers.

Summary

As you can see, each of these well-known crypto trading exchange platforms can match the needs of different types of traders. Here is a table that highlights the main characteristics of the above-mentioned exchanges: