How to choose the best Uniswap Alternatives as a Beginner?
Since its origin, decentralized finance, or DeFi, has revolutionized the crypto world. Investors have been steadily supporting DeFi projects that emerge from time to time. Nowadays, there has been a consistent shift to DeFi because it is far more accessible, transparent, and secure than its centralized counterpart. Therefore, many decentralized exchange platforms like Uniswap and Uniswap alternatives are available on the market. But how does a beginner choose the right match without knowing the basics?
To answer this, we have explained in this article the right way to choose the best Uniswap alternatives. But to understand that, we must comprehend why one needs an alternative to Uniswap in the first place.
Uniswap: Is the largest DEX in crypto good enough for beginners?
Uniswap is the best-decentralized exchange platform for easily trading cryptos using the Ethereum blockchain. Its facilities are not only limited to that but also expand to offer buying, selling, and generating passive income via yield farming.
Being the largest DEX on the Ethereum blockchain has made Uniswap nothing less than an iconic platform with state-of-the-art features. Since 2018, it is considered the most popular platform to use when one wants to swap ERC-20 tokens. Now this DEX operates as a public tool that requires no KYC and no registered accounts to facilitate a swap between ERC-20 tokens without relying on a third party.
Problems with Uniswap:
- Uniswap has its own native token, UNI, but it only has a governance model that does not provide the monetary benefits that most users are looking for when using DEXs to generate passive income.
- Issues related to slippage are well-known to Uniswap users and the entire industry. Even though Uniswap has tried fixing these issues through the V3 release, there are no signs of development in this case.
- Beginners who do not have sufficient assets to use an expensive platform like Uniswap often end up searching for its alternatives. Uniswap is also slower than its alternatives.
- Bugs and other technical problems in Uniswap V3 continue to plague the platform, making beginners refrain from using the DEX.
- For a long time, Uniswap has been considered too centralized to serve as a decentralized exchange platform.
Due to the aforementioned reasons, there is a growing demand for Uniswap alternatives among both beginners and experts. So now that we understand why Uniswap is not an ideal match for every single market participant, it is time to explain in detail how one can choose Uniswap alternatives:
Compatible with preferred crypto
A DEX is supposed to empower its users to explore and find more small-cap gems for them to exchange. The more users find emerging cryptos to trade with, the more a DEX liquidity pool will expand. But not all DEX platforms offer sufficient crypto choices to trade with, and that is why you must choose the one with your preferred cryptos.
Matches your risk tolerance
One of the apparent differences between DEX and CEX is that DEX requires vetting before listing any coins. Due to the nature of DEX, this coin vetting process is skipped, which often causes it to be prone to rug pulls. Beginner traders are not aware that the coins being listed exclusively on a DEX display more volatility and thus pose greater risks.
Easy and effortless user interface
While picking the best DEX out of a range of available options, user-friendliness should be one of the considerations to make. It is pointless for beginners to join any DEX they find popular and highly recommended by experts when they have limited knowledge about its usage. It’s important to know your preference for UI and choose a DEX accordingly.
Essential security features
In the end, every crypto venture relies greatly on security and transparency. For every market participant, it is of prime concern. There are several decentralized exchanges available for one to use, but not all of them provide the necessary security features. Beginners are more likely to get scammed by emerging DEXs than by any other crypto service.
Despite the demand and significance of Uniswap, beginner crypto traders tend to avoid it and choose one of the Uniswap alternatives instead.