Decentralized finance on the blockchain offers complete freedom to transact and trade as you desire.
Since the first Bitcoin block was mined, the ethos of cryptocurrency has been permissionless, trustless finance accessible to all: no gatekeepers, no discrimination, just a rules-based system of exchange.
With all the options available today, Satoshi himself would be proud. His acolyte Vitalik has opened the floodgates to advanced permissionless financial systems extending far beyond means of exchange.
But this leads us to the question: how can decentralized finance best be accessed and navigated? Where does one start, and how do we mitigate risk in such a new field?
This dynamic ranking articulates the top 10 decentralized protocols for trading and staking assets with advanced tools like leverage, perpetual contracts, options contracts, and liquidity provision.
TLDR; CoinClaro presents what you do not know but need to know before swapping, leveraging, optioning, and staking on-chain. Choosing the most secure decentralized exchanges with the most liquidity will better protect your funds from counterparty risk while accessing preferred fees, slippage, and overall cost-to-transact.
Top 10 Defi Exchanges for leverage, options, staking, liquidity, and perpetual trading
The following dynamic ranking is updated weekly and monitored for exploitation. Protocol volume and security is the primary ranking factor, while accents like exotic trading pairs and LP incentives matter less.
Disclaimer: Where applicable, CoinClaro has sourced fee-rebate coupon/referral codes to save you money while trading and to support CoinClaro. These are after-the-fact additions to the content and do not influence the dynamic ranking.
GMX is the most widely used anonymous developer-produced decentralized trading protocol.
GMX has been operating since 9/1/2021 as a true bootstrap hero, processing over $140 billion in volume. GMX proves intuitive financiers are attracted to trustless symbiotic frameworks for trade opportunities, liquidity provisions, and governance.
- As a trading suite, GMX leaves little to be desired with 50X leverage, limit order functionality, take-profit functionality, multi-currency settlement, and isolated margin.
- As an interest-earning suite GMX impresses the leading dividend-earning portfolios of old with GMX staking bonus multipliers, GLP liquidity pools, and soon isolated pools with GMX V3.
Either opportunity is available to all users, big or small.
Understandably, an anonymous development team may undermine confidence in any financial protocol. However, such circumstances present unique benefits as well. Because the team behind GMX is unknown, the protocol is safeguarded against government intervention and developer extortion.
This also benefits adoption with restriction-prone countries like the United States, Cuba, Canada, and more being able to access leverage trading on GMX.
Geo-restrictions: none; accessible to all
Blockchain: Arbitrum L2 on Ethereum, Avalanche
Trading Pairs: ETH, WBTC, UNI, LINK. More to come with V3.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: Cross-asset liquidity pool via GLP staking.
Custody: Self-custody single-approval trading with no deposits required.
GMX Exploit History:
- In September of 2022, someone found and exploited a weakness in the price manipulation protection system of the GMX.IO exchange. They were able to steal approximately $565,000 by opening significant positions with no slippage and then transferring the AVAX/USD to centralized exchanges at only slightly higher prices.
DYDX was the first on-chain leverage trading protocol running on Ethereum that maintains top-dog relevance today.
With humble beginnings on Ethereum main-net, DYDX grew and evolved to run on Starkware. Starkware, a layer two solution to Ethereum scaling, has increased the speed of DYDX while minimizing gas fees to a fraction of the original cost.
- DYDX allows trading across 36 asset pairs with up to 20X leverage on perpetual swaps. Manage your entries and exits with limit orders and take-profits. Manage your risk with stop-losses.
- Earn DYDX token bonuses for fees spent, earn interest on deposited liquidity, and stake DYDX to participate in protocol rewards.
DYDX functions with deposits and withdrawals into the Starkware trading protocol smart contract. These deposits make your account eligible to earn interest on non-deployed assets and earn/pay funding rates on working funds.
Operating in compliance with US regulations out of San Francisco and New York, DYDX operates the decentralized DYDX exchange centralized management. However, the caveat to this transparency is that all United States residents are restricted from accessing the exchange.
Geo-restrictions: United States, Canada.
Blockchain: Starkware L2 on Ethereum.
Trading Pairs: ETH, WBTC, UNI, LINK. More to come with V3.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: Hybrid liquidity with liquidity providers and market makers.
Custody: Deposits to the smart contract required.
dYdX Exploit History:
- In November 2021, a severe vulnerability was detected in the dYdX deposit proxy smart contract. This flaw enabled an attacker to withdraw funds from users who had placed assets in the exchange. Despite the dYdX team recovering roughly $2 million in user funds, the exploit caused a loss of approximately $1 million in user funds.
- In September 2022, the dYdX exchange fell victim to a supply chain attack. The attacker accessed the dYdX NPM account and published harmful code to the dYdX GitHub repository. This code was then used to deploy a dangerous smart contract on the dYdX exchange, resulting in the theft of approximately $300,000 in user funds.
MUX Network aims to deliver a decentralized exchange that functions by routing to all other decentralized exchange platforms. Hence “MUX” is short for multiplexing: where scattered liquidity across multiple exchanges can be routed through one central decentralized system.
V2 of Mux Network is currently deployed out of 4 planned versions. With V2, MUX is fully composite with GMX and Gains Network, offering up to 100X leverage on crypto, 250X leverage on FOREX, and 250X on commodities.
The MUX Network is highly accessible, trading on Arbitrum, Avalanche, BNB Chain, Optimism, and Fantom. Testnets extend further to Polygon and Scroll.
Like GMX and dYdX, MUX Network also functions with rewards-based governance and liquidity. The LP pool is entered and exited via the liquidity token MUXLP, a diversified pool of 14 assets across supported chains. The protocol coins MCB, MUX, and intermediary veMUX comprise the governance ecosystem and provide staking rewards.
The MUX Network offers more expansive access to brand-new assets, perpetual leverage, and liquidity. However, these exotic features bring added complexity that may increase exploit risk in the future (to date, there have been zero MUX exploits).
Geo-restrictions: none.
Blockchain: Arbitrum L2 on Ethereum, Optimism L2 on Ethereum, Avalanche, BNB Chain, Fantom.
Trading Pairs: 65 pairs categorized by 48 crypto, 17 forex, and two commodities.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: Cross-platform liquidity with cross-asset liquidity staking.
Custody: One-click trading, no separate deposits to the MUX smart contract required.
MUX Network Exploit History:
MUX, formerly McDex, was exploited in June 2022. A critical vulnerability was found in the platform’s broker contract, which allowed an attacker to drain the funds of users who had deposited collateral.
The exploit was discovered by a security researcher named Lucash-dev, who reported it to the McDex team. The team acted quickly to mitigate the exploit and refund the affected users.
The exploit was a significant setback for McDex, but the team’s swift response helped to minimize the damage. Several security firms have since audited the platform; no other critical vulnerabilities have been found.
ApeX Protocol (Ape-X) hosts the ApeX Pro decentralized exchange offering hybrid zero-price-impact trading with order book. Secured by Starkware’s StarkEx and Validium, ApeX Pro offers a dYdX trading experience available to all geo-locations and interoperable with the leading L2 solutions and smart chains.
ApeX Pro Decentralized Exchange Tokenomics:
- Smart Liquidity Pool: A subscription-based ‘optimal market-making strategy’ liquidity pool leveraging advanced algorithms and trading signals. Returns a unique market-making APR based on total market-making fees. To enter the pool, you subscribe your funds while admittance is active. To withdraw, you withdraw.
- APEX, esAPEX, and veAPEX Staking: APEX is the governance token of ApeX Pro Exchange which earns APY. esAPEX represents staked APEX within the staking system. veAPEX represents an additional reward-earning certificate that proves you are staking esAPEX and grants governance. Currently, APY can be boosted even further by participating in trading events.
- BANA Rewards: BANA is a rewards token earned via trading competitions that is exchangeable for APEX following unlock schedules.
ApeX Pro processes significantly less volume than the leading decentralized exchanges like GMX and dYdX, making it a potential underdog to invest into. However, as we learned from the trove of Uniswap clones that popped up in 2021, not all will survive, and the vampire effect can be real.
Geo-restrictions: United States, Canada.
Blockchain: Starkware L2 on Ethereum compatible with Arbitrum, BNB Chain, Polygon, Avalanche, and Optimism.
Trading Pairs: 17 cryptocurrency pairs.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: Market-making liquidity pool.
Custody: Deposits to the smart contract required.
ApeX Pro Exploit History: No known exploits of Apex Pro Exchange since its inception on November 21st, 2022.
VELA Exchange is an Arbitrum-powered, decentralized zero-price impact perpetual contracts exchange offering cryptocurrency, currency exchange, and gold/silver trading with high leverage.
Strikingly similar to MUX but without complications, VELA Exchange sticks to Arbitrum compatibility and its liquidity pool (VLP) that exists solely in the USDC state. Like MUX, VELA offers FOREX and Gold/Silver trading via OTC, P2P, and centralized trading integrations.
VELA Exchange Tokenomics:
- VLP: The liquidity provider token for VELA Exchange which earns 10% of perpetual fees in esVELA with the potential for VLP to increase in value.
- VELA and esVELA: VELA is the utility token of the exchange, and esVELA is the escrowed variation. The staking of VELA and thus esVELA earn the following fees: 10% perpetual fees, 5% total USDC perpetual fees, 40% of spot fees, ecosystem rewards, and trading fee discounts.
Assuming a decentralized trading adoption event will soon occur, earning utility token rewards and a stake in DEXes like VELA could be lucrative. The same applies to other lower-volume PERP DEXes discussed on this page.
Geo-restrictions: United States.
Blockchain: Arbitrum L2 on Ethereum with cross-chain VLP funding.
Trading Pairs: ADA, ARB, ATOM, AUD, AVAX, BNB, BTC, DOGE, DOT, ETH, EUR, GBP, LTC, MATIC, PEPE, SHIB, SOL, CAD, CHF, CNH, JPY, MXN, USDT, XAG, XAU, XRP, all against USD.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: VLP liquidity pool denominated in USDC with funding rates.
Custody: Deposits to the smart contract required.
VELA Exploit History: None to date.
Vertex Exchange is a complete DEX offering spot trades, perpetual leverage trading, and yield earning.
Utilizing a hybrid order book AMM DEX, Vertex uses all exchange funds for cross-margin liquidity in the perpetual trading engine.
For spot trading, Vertex uses deep liquidity provider pools. Currently, spot trading covers ETH, WBTC, and ARB.
The cross-margin capability of Vertex means two things:
- Firstly, you can earn interest on any deposited asset.
- Second, you can margin against any asset deposited.
Later updates to Vertex will include a broader range of liquidity pool pairs to enhance protocol lend/borrow stability. Regardless, Vertex makes it very easy to leverage trade cryptocurrencies you do not have by margining ones you do.
Geo-restrictions: Belarus, Cuba, Iran, North Korea, Russia, Syria, Ukraine (Crimea, Donetsk, Kherson, Luhansk, and Zaporizhzhia regions), United States of America.
Blockchain: Arbitrum L2 on Ethereum.
Trading Pairs: ETH, WBTC, UNI, LINK, OP, XRP, SOL, APT, SUI, BNB, ARB, LTC, MATIC, BCH.
Financial Instruments: Swap, trade, Leverage.
Liquidity Scheme: Hybrid liquidity with liquidity pools and cross-margin capability.
Custody: Deposits to the smart contract required.
Mobile friendly: Yes.
Vertex Exploit History: None to date.
Frequently Used Definitions, Terms, and Concepts
- Geo-restrictions: These are limitations placed on content access based on the user’s geographical location. They are commonly used by online platforms such as video streaming services, where licensing agreements may only cover specific geographic areas.
- Blockchain: This type of distributed ledger technology where transactions are recorded in blocks linked together in a chain. Each block contains a record of several transactions, and a new one is generated each time a block gets completed. Blocks are connected in a linear, chronological order, with every block containing a hash of the previous block.
- Financial Instruments: These are monetary contracts between parties. They can be created, traded, modified, and settled. They can be cash (currency), evidence of ownership in an entity (share), or a contractual right to receive or deliver cash or another financial instrument (bonds, futures).
- Liquidity Schemes: These are strategies or mechanisms designed to ensure that assets can be easily bought or sold without causing a significant movement in the price and with minimum loss of value. In the context of DeFi, liquidity schemes often involve rewards for those who provide liquidity to a protocol.
- Custody: This refers to the holding and safety of financial assets for a client by a third party, typically a bank or financial institution that holds securities and other investments in electronic or physical form. In the crypto world, it also refers to services that store, secure, and protect an individual’s or institution’s cryptocurrency assets.
- Perpetual Futures (Perp): A type of futures contract where the buyer and seller agree to transact one asset for another later and a set price. However, unlike traditional futures, these contracts do not have an expiry date.
- Decentralized Exchange (DEX): This cryptocurrency exchange operates decentralized, i.e., without a central authority.
- Perp Dex: A decentralized exchange with perpetual future contracts/swaps.
- Isolated Margin: A margin method that keeps the margin balance of a position isolated from the rest of the user’s wallet balance.
- Cross Margin: A margin method that utilizes the account’s entire balance to avoid liquidations.
- Collateral: Assets pledged to secure a loan, often used in DeFi to secure a borrowing or a position.
- Liquidation: The process of closing positions when traders cannot fulfill margin requirements for a leveraged trade.
- Leverage Ratio: The ratio indicating the level of debt incurred by a business entity against several other accounts in its balance sheet, income statement, or cash flow statement.
- Initial Margin: The minimum amount a client needs to deposit to open a position.
- Maintenance Margin: The minimum amount of equity must be maintained in a margin account.
- Over-collateralization: The practice of placing more collateral than is needed to secure a debt or a leveraged position.
- Flash Loans: Unsecured loans that allow borrowing without collateral for the duration of a single transaction.
- Yield Farming: The staking or lending of crypto assets to generate high returns or rewards in additional cryptocurrency, often leveraging these positions.
- Automated Market Maker (AMM): A decentralized exchange protocol that relies on a mathematical formula to price assets. It can be used to increase leverage.
- Liquidity Pool: A smart contract that holds funds. In return for providing liquidity to the pool, providers can earn fees. These pools can be leveraged in some protocols.
- Swap: A swap is a derivative contract through which two parties exchange financial instruments, often used in DeFi for interest rate or asset swaps.
- Debt Ratio: This measures the leverage used, comparing the total debt, or liabilities, to the full value (total debt + equity).
- Risk Management: Identifying, assessing, and controlling threats to an organization’s capital and earnings. A crucial aspect when dealing with leveraged positions in DeFi.
- Rebasing: A method used by certain types of cryptocurrencies where the circulating supply is increased or decreased automatically.
- Oracle: Oracles are data sources that provide information from the outside world to the blockchain. They are critical in DeFi, providing price information for managing leveraged positions and loans.
- Synthetic Assets: Financial instruments in the form of digital assets that represent other real-world assets on the blockchain. Synthetics can create leveraged positions.
- Margin Call: A margin call occurs when the value of a trader’s margin account falls below the account’s maintenance margin requirement.
- Smart Contracts: A self-executing contract with the terms of the agreement directly written into code. They automatically execute transactions if certain conditions are met. They are the building blocks of DeFi.