1/ Today Uniswap Labs, PancakeSwap, and DODO constitute more than 75% of total volume.

2/ The largest selling point is they’re non-custodial, i.e., you are in control where centralized exchanges (CEX) are the opposite. DEXs range from orderbooks, AMMs, to hybrids.

3/ Orderbooks allow buyers and sellers to set offers around assets. These offers get ordered into a list of buys & sells that create a market. Voila. An analogy for this in fintech is using a centralized third party (Fidelity Investments for your stocks), while an orderbook DEX functions runs via smart contracts. Examples are Gnosis and Loopring.

4/ AMMs don’t rely on orderbooks. Instead they center around liquidity pools that are secured by smart contracts and are filled with two or more cryptocurrencies. Examples are Bancor and Uniswap Labs.

5/ Hybrids all differ (a little) but essentially take AMM liquidity pools and offer orderbook UIs. Some also differ greater than my simplistic view. Examples are AliumSwap and Onomy Protocol.

6/ Many individuals view AMMs as an upgrade to orderbooks. But in reality, it’s just a different user experience. You can view orderbooks as proactive market-makers and AMMs being passive.

7/ Dig in below if you want to read the Uniswap whitepaper (it’s worth it): And here you’ll find some easy to consume charts from The Block to spin yourself up:

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