Hey folks, so if you’ve managed to survive the multiple collapses, rug pulls and fraudulent behavior of many different centralized exchanges over this past year, first of all congratulations, and I hope you’re with me in the long haul of this bear market.
What I plan to highlight in this article, is that you can pretty much do everything (rather easily) on a decentralized exchange (DEX) that you might want to do on a centralized exchange, and perhaps even more. From what I could tell, the only feature lacking on DEXes is your ability to convert your crypto back into good ol’ fiat.
If you’ve been following my other articles, you’ll know that I’ve written about a few different CeFi platforms, half of them which have turned out to be either insolvents or fraudulent (or at the very least simply mismanged) of customer’s assets. As if I hadn’t learned my lesson, the final nail in the coffin was OkCoin’s announcement last December when they announced that they were removing the majority of their trading pairs, leaving really all they have left limited to BTC/USD, ETH/USD, USDT/USDC, NYC/USD, MIA/USD, and USDT/USD. The only reason why I had anything left on OKCOIN was to do limit orders, thus the removal of almost all their trading pairs sent me down a rabbithole to start looking at other options to put my limit orders in. Now just to be clear, I haven’t seen any evidence that OkCoin is in any type of real trouble, it’s just that moves like this served as a another reminder that it’s not my keys, it’s not my crypto.
So where can you make these limit orders in DeFI?
If you’re wanting to buy and sell crypto at a certain price, there are plenty of different options you can choose from.
DEXes with Limit Orders
Matcha.xyz on Ethereum Mainnet:
Matcha supports several chains, but the only one where you can perform limit orders is on Ethereum Mainnet. Matcha is a very easy-to-use platform that actually sources price points from multiple exchanges for better swap prices, including Uniswap, Sushi, Quickswap, and also Pancakeswap, which I’ll get into next.
Pancakeswap on BINANCE Smart Chain:
Pancakeswap is the most heavily used DEX on BSC, so it’s no wonder that they have a limit order function as well too. If you haven’t read my latest article on Pancakeswap and their native token $CAKE, I highly recommend that you do so.
SpookySwap on Fantom:
Similar to Pancakeswap, Spooky is the most widely used DEX in the Fantom ecosystem, so it’s no wonder that they offer a limit order function as well. One more thing to note, like Pancakeswap and Quickswap (which i’ll talk about next) these DEXes all use to power their limit orders.
Quickswap on Polygon:
If you disregard DEXes that also deal with Ethereum Mainnet (i.e., Uniswap and Sushi), Quickswap is the largest DEX in TVL that functions solely on the Polygon network.
Cons of doing limit orders on DEXes (as opposed to CEXes)
Great, so there’s a lot of options to do some limit orders on DEXes, so there’s no reason to ever go back to a CEX right? Well, not quite, or at the very least there are still some things left to consider:
Shallow Liquidity: There’s no hacking around this one, until DeFi gains more traction, there’s simply a LOT more liquidity on centralized exchanges than they are on DeFi ones:
If you take the above DeFiLlama numbers, the top 4 DEXes TVL combined still barely only add up to a sixth of the amount of AUM that Binance has. Now this might not matter as much if you’re trading smaller amounts of tokens, but then I would argue that potentially high gas fees might make the trade not worth it. This leads me to the next point…
Gas fees: Of course it takes gas to get your tokens to and from a CEX as well, but once you’re on there, most exchanges will only charge a set, nominal fee depending on the size of your trade. On the other hand, a DEX’s gas fees are dependent upon the current network congestion for how much you will ultimately get charged. For instance if you were trying to put in an order on Ethereum Mainnet during a liquidation cascade event, you could easily be paying upwards to hundreds of dollars worth of $ETH in gas fees trying to get your order through.
Trading Bots: Now I’m not a dev, but from my understanding there’s not really any good retail trading bots that run from DeFi. The overwhelming proportion of trading bots out there sync up via exchanges. Hopefully this changes in the near future, but for now, just because you can make limit (or leverage) orders via DeFi, doesn’t mean that you can automate 100’s of opening and closing of trades automatically directly from your web3 wallet.
Were there any options that I missed? If you use and trust any other DeFi protocols with limit order functions I’d love to hear about it in the comments below. Or, if you’ve noticed any other cons of DeFi trading that I haven’t mentioned in this article, I’d love to hear about that as well too.
As always, thanks for taking the time to read this and be sure to follow me on twitter (https://twitter.com/CryptosWith) to get all my latest updates.
Disclaimer: And as a final reminder, this is not financial advice and this is for educational and entertainment purposes only. Please as always, do your own research and find what investments are best for you. Cheers everyone!
