Decentralised Crypto Exchanges (DEX): Network Fee Against Pool Fee, and Why Custody Decides

The information provided in this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry a high degree of risk. Always conduct your own research.On Ethereum a swap through a decentralised exchange currently costs three to five cents in network fees, while the fee for the liquidity pool runs between 0.01 and 1.00 percent depending on the pair. That leaves both routes level on cost, and what comes afterwards decides: custody, supervision and records.A decentralised crypto exchange, DEX for short, is a program on a blockchain that settles swaps itself, without a company holding customer funds in custody. Anyone using one pays two prices: a network fee to the blockchain and a fee to the liquidity pool the swap draws on. On Ethereum the network fee for a swap currently stands at three to five cents, which effectively removes it as an argument. What remains is the question that fees cannot answer: who holds your coins, who is liable when something goes wrong, and who provides the records for the tax office. This article works out the costs of both routes against each other and shows where the difference really lies. What separ...