Guide to Crypto Exchange, and the top performing crypto exchanges you need to know!
Copied!
What are Crypto Exchanges?
Crypto exchange is a platform where you can trade cryptocurrency either by buying or selling them. One can easily trade crypto either by using normal currency or by exchanging one crypto with another. Cryptocurrencies can be easily converted into national/fiat currencies and could be saved within your account or to your regular bank account. For instance, $100 can be exchanged against the same bitcoin value. A similar concept is applicable for different assets as well.
What are the 3 main types of crypto exchanges?
Crypto Exchanges are generally of 3 main types which are categorized according to their usability. So, let’s read on to have a better understanding of them.
1. Centralized Exchanges
Central cryptocurrency exchanges are the conventional exchanges in the crypto world. There is a centrally governing entity that allows crypto-to-fiat trading as well as crypto-to-crypto trading. Since it offers high reliability, 90% of all transactions are carried out through centralized exchanges. The biggest and most significant advantage of CEX(Centralized Exchange) is, it is simple to use and has an impressive UI/UX that helps provide quick responses. A few of the most famous platforms like XCOEX offer liquidity aggregation that helps traders to get the closest prices with minimalistic spread. Best examples of some of the popular cryptocurrency exchanges are – Binance, Gemini, Coinbase, Kraken and GDAX.
2. Decentralized Exchanges
Decentralized exchanges of cryptocurrency (DEX) enables users to carry out digital currency exchange without a central entity involved. Smart contracts and decentralized applications help in automating the trades which makes DEX more secure. However, DEX doesn’t allow trading of fiat currencies and uses Ethereum primarily to operate. It has a low trading volume and lower liquidity. Since this platform is not regulated by any central entity, it is ,however, likely safe from shutting down. However, DEX focuses on experienced users and unlike CEX, there is no customer support available in DEX. Some of the examples of DEX are – Uniswap, PancakeSwap, Barterdex and AirSwap.
3. Hybrid Exchanges
Hybrid exchanges are the best of both the worlds, CEX and DEX. It offers security assurance just like DEX and a fast transaction speed like CEX. Hybrid marketplaces are still in their nascent stage but are soon going to experience a major boom. Nash, Eidoo and Qurrex are some of the most popular hybrid exchanges known so far.
| Centralized exchange (CEX) | Decentralized exchange (DEX) | Hybrid exchange (HEX) | |
| Trading volume | Very High | Medium – Low | Low |
| Speed | Extremely fast | slow | fast |
| Liquidity | High | Low | Low |
| Fiat exchange | yes | no | yes |
| UI/UX | Simple to use | Hard | Simple to use |
How do cryptocurrency exchanges work?
Crypto exchanges usually take place by signing up for the exchange and submitting identity verification documents. The next step is to fund your account with the cryptocurrency and make a transaction by setting a ‘buy order’. Once the account is set up, the exchange maintains an ‘order book’ where all the buy and sell orders are congregated to automatically match the buyers and the sellers. There are fundamentally two types of orders that are allowed by the exchange – ‘market buy’ orders and ‘limit buy’ orders.
Market buy orders – when a market buy order is created, the exchange will match the buyer with the seller that shows the lowest price of trade and will execute it. Once the trade is made, the crypto wallet will be immediately credited with the currency.
Limit buy orders – when a limit buy order is created, the trade indicates how much currency you will buy and the price you will pay for it. When there are sellers who accept the price you are willing to pay, the currency will reflect in your wallet and will be paid against the set amount.
Which crypto exchange is best?
Market is right now flooded with crypto exchange platforms and various platforms provide multiple perks like security, market availability, volume and commission rates. Here are some of the top platforms that perform better in terms of ratings, volume, popularity and flexibility, etc.
Top 10 Centralized Crypto exchanges
- Binance.US
- Huobi Global
- Coinbase (Pro)
- Kraken
- Huobi Global
- Bithumb
- Bitstamp
- FTX
- bitFlyer
- KuCoin
Top 10 Decentralized Crypto exchanges
- Uniswap
- TokenIon
- PancakeSwap
- 0x Protocol
- Sushiswap
- Burgerswap
- Venus
- Curve Finance
- 1inch Exchange
- Compound
Let’s dig a little deeper into some of the best crypto exchanges:
1. Coinbase
Coinbase is one of the most popular crypto exchanges because of its volatility, easy interface and powerful security features. It is the most well-known crypto exchange platform in the U.S. and was seen as a legitimation of the crypto market. It offers a variety of learning material and teaches to trade cryptocurrencies. It also helps users with free crypto.
2. Binance.US
Binance.US is known for low fees as it offers the most flexible fee structure across trading platforms. Binance is also the biggest crypto exchange considering trading volume. As the trading volume increases, the fee starts getting lower. Binance also gives discounts for the company’s proprietary cryptocurrency(BNB) for selling and buying coins.
3. Crypto.com
Crypto.com is the best crypto exchange known for security due to the different level of protection it offers against cyberattacks and fraud. This platform uses various techniques to keep the users’ cryptos secure as well as multi-factor identification with an authenticator verification, biometric, phone, email, etc. Crypto.com is the platform that offers a wide range of currencies to select.
4. Bisq
Bisq is a decentralized exchange that follows the ethos of Bitcoin by maintaining an open-source platform which is extremely decentralized without restricting any currency support. It brings an easy to use interface and vast coin support of centralized exchanges to a decentralized exchange.
5. BlockFi
BlockFi is known for earning interest as it allows users to borrow money and earn interest on crypto. It also creates financial products that work for conservative traders. BlockFi’s interest account offers upto 9.5% APY to crypto investors and also helps users use existing bitcoin as loan collateral. This exchange also offers affordable fee structure and a robust cybersecurity. The exchange doesn’t charge any transactional fee for trading on exchange.
Top cryptocurrency exchange development company in India
OpenXcell is the leading crypto exchange development company in India that specializes in cryptocurrency exchange services. The solutions developed by OpenXcell have high-security standards and multiple payment methods. With the help of its pool of experts, OpenXcell has worked on projects that have high liquidity and advanced order-matching algorithms. With all the technical requirements, and implementation & maintenance of exchange, our experts maintain high accuracy in creating and checking all the components. So, in case you are in need of a cryptocurrency trading solution, contact our experts at sales@openxcell.com
