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

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 separates a decentralised crypto exchange from a centralised one

At a centralised exchange, often called a CEX, you transfer euros to a company account, buy coins there and leave them in place. The house keeps an internal account of your holdings, matches buy and sell orders in its own order book and holds the keys.

At a decentralised exchange the holding stays in your own wallet. You connect the wallet to a website, confirm a signature there, and the program on the blockchain executes the swap. Nobody receives money beforehand, there is no account, no registration and no identity check. That removes the counterparty, but also every place that could correct a mistake.

The second practical limit lies with the money itself: a DEX does not accept euros. Entry almost always runs through a centralised exchange or a broker, and only after that can you swap decentrally. The two routes are therefore less often alternatives than stations one after the other.

How a swap through an automated market maker works

An automated market maker, AMM for short, is a liquidity pool of two crypto assets whose price follows solely from the ratio of the two balances. There is no order book and no counterpart who wants to sell at your price.

If you put asset A into the pool, you take asset B out. That raises the balance of A and lowers the balance of B, and for exactly that reason the price shifts against you with every swap. With small sums in a large pool that shift is barely measurable; with large sums in a small pool it becomes the main cost item. Those who provide the liquidity pools collect the fee that every swapper pays.

Three to five cents: what the network fee on Ethereum costs right now

The network fee is the amount the blockchain charges for executing a transaction; it depends on the computational load of the operation and on demand in the network, not on the sum swapped. It is paid in Ether.

On October 9 the gas price on Ethereum stood at just under 0.12 Gwei, so around one eighth of a billionth of an Ether per computational unit. A simple swap through a decentralised exchange needs roughly 120,000 to 200,000 such units. That produces three to five cents, regardless of whether you swap 50 euros or 50,000 euros.

This figure is a snapshot and not a rule. In phases of high demand the gas price has stood at 30 Gwei and more; the same swap then costs around ten euros. The network fee is thus the only item that can move by a factor of two hundred between two days, and it hits small amounts hardest.

The pool fee is the actual price, not the network fee

The fee for the liquidity pool, by contrast, is calculated as a percentage and falls due on every swap. Large decentralised exchanges tier it by trading pair; the usual steps are 0.01 percent for stablecoin pairs, through 0.05 and 0.30 percent, up to 1.00 percent for rarely traded assets.

That puts both routes in the same order of magnitude. A centralised exchange likewise charges fractions of a percent of the order size, tiered by house and trading volume; what actually applies there is in each provider's price list. The claim that decentralised is fundamentally cheaper does not survive the arithmetic, because it applies only to the network fee and collapses on the pool fee.

The break-even sits at a few euros, and after that it no longer counts

A short calculation with today's values, as an example and not as an offer: if you put the network fee at four cents and a centralised exchange's fee at one percent, then both routes cost the same at an order size of four euros. At a quarter of a percent the break-even sits at 16 euros, at a tenth of a percent at 40 euros.

Above those amounts the network fee disappears into the noise, and all that decides is whose percentage fee is lower. Below them the decentralised route does not pay off even at four cents, because connecting the wallet, the signature and checking the target price cost time that bears no relation to a ten-euro swap. Anyone regularly buying small sums is practically always better served by a savings plan at a centralised provider.

Custody: at a DEX there is no recovery of access

This is where the difference lies that makes the fee calculation redundant. At a centralised exchange you can reset a password, write to support and, in a dispute, lodge a complaint. If you lose access to your own wallet, the holding is gone, finally and for any amount.

The same applies to mistakes while swapping. A signature you confirm is executed; a wrong destination address, a cloned portal or a tolerance set too wide cannot be revoked. Which device protects the keys and what can go wrong during setup is in our hardware wallet comparison. A decentralised exchange cannot be used without self-custody, and anyone who does not trust themselves with that responsibility has already answered the question of the DEX.

Supervision and MiCA: who is liable at a decentralised exchange, and who is not

A centralised exchange serving customers in Germany has needed authorisation as a crypto-asset service provider since 2025 and is under supervision. How the German legislature has framed that permission is set out in our article on the Crypto Markets Supervision Act.

For a protocol with no provider behind it, the classification is contested: whether and when an interface, a foundation or a development team counts as a service provider is examined case by case by the supervisory authorities, and no conclusive line exists. For the user the consequence is the same on either reading. There is no authorised contractual partner, no complaints body and no requirements on the segregation of customer funds, because there are no customer funds.

A widespread misunderstanding belongs corrected here: deposit insurance does not protect crypto assets at a centralised exchange either. What supervision delivers is organisational duties, complaint routes and a body that can be held to account, not a guarantee on the holding.

Just under a fifth of spot trading runs through decentralised exchanges

The relative sizes put the topic in context. On October 9 decentralised exchanges turned over around 10 billion dollars in 24 hours, the twenty largest centralised venues around 44 billion dollars in spot business. Decentralised venues therefore account for 18 to 19 percent of volume, depending on whether some offerings not settled on a blockchain are counted in.

The distribution within decentralised trading is narrow: Uniswap alone, in its two current versions, carries around three billion dollars and thus almost a third. Then follow, at a clear distance, PancakeSwap with about 680 million and Aerodrome on Base with around 620 million dollars. Anyone swapping decentrally ends up in practice at a handful of venues, and on the smaller ones the price shift from the section on the automated market maker becomes noticeable.

Slippage: the sum decides the price you get

Slippage is the deviation between the price an interface displays and the price at which the swap is ultimately executed. At a decentralised exchange you set a tolerance for it yourself, usually as a percentage.

This setting is the most delicate point of the whole operation. A tolerance set too tight makes the swap fail, and the network fee is still due. A tolerance set too wide opens the door to a worse price, up to deliberate exploitation by third parties who see a large order in the network and place themselves in front of and behind it. In practice that means: the smaller the liquidity pool and the larger your sum, the more precisely the displayed execution price needs checking, and before the signature, not after.

Tax: every swap on a DEX is a disposal

For tax the decentralised route brings no advantage, and many underestimate exactly that. Under Section 23 of the German Income Tax Act, the gain from a private sale of crypto assets is taxable if less than a year lies between acquisition and disposal; after that year has passed it remains tax-free. For the total of all private disposals in a year an exemption threshold of 1,000 euros has applied since 2024, and anyone exceeding it pays tax on the entire gain.

A disposal counts not only as a sale for euros but also as a swap into another crypto asset. The Finance Ministry circular of March 6, 2025 states this expressly for the administration and has replaced the older circular from 2022. A swap from Ether into a stablecoin is therefore a taxable event like a sale, even though no euro was moved.

With every swap, moreover, a new one-year period begins for the asset received. Anyone swapping back and forth several times within a year resets the clock each time, and with decentralised exchanges and their low network fees that is a realistic pattern. What a change of trading venue means for the deadline, by contrast, we have written up under switching crypto exchange: a mere transfer to an address of your own is not a sale.

Records: what the tax office expects from you at a decentralised exchange

A centralised exchange keeps an account, shows a history and often provides an annual statement. A decentralised exchange keeps no account on you. What remains are entries in a public blockchain which are complete, but not ordered by person.

Since the 2025 circular the administration expects a complete record of transactions and a consistent determination of market values. For the order of the holdings disposed of, the administration provides for the method under which the units acquired first count as sold first; a tax court in 2025 also held the reverse order admissible, which does not make the situation easier for investors. Which records are demanded in an audit we have gathered in our article on the crypto tax audit.

In practice that means three things which should be settled before the first decentralised swap: the address of your own wallet noted down, every swap recorded with date, quantity and value, and a tool in use that can read in the blockchain entries. Anyone starting only at the turn of the year reconstructs prices from the past, and that is more work than the record-keeping itself.

What a decentralised exchange is not: leverage, perpetuals and prediction markets

In the same world there are offerings that have little to do with a simple swap. Perpetuals are open-ended futures contracts with leverage, where a price move against your position leads to forced closure. The products look similar in presentation and are not comparable in risk; they belong in a separate treatment, which we keep in our comparison of perp DEXs.

For this article a clear demarcation therefore applies: what is meant is the swap of one crypto asset into another at the prevailing price, without leverage, without funding costs and without liquidation risk. Anyone who, while browsing a decentralised interface, strays into a section with leveraged products has changed product area, even if the page looks the same. Total loss is possible there within minutes.

DEX or centralised exchange: custody decides, not the fee

Three steps lead to a decision that fits your own situation:

1. For entry with euros it stays with the centralised exchange. A decentralised venue accepts no bank money, and for regular small purchases a savings plan beats any network fee. Which provider works at which costs is shown by our crypto exchange comparison.
2. Authorised or not, settle it before the first euro. Check whether the provider you have chosen holds a permission for business in crypto assets, because the complaint route and organisational duties hang on that. The houses with authorisation are in our comparison of regulated crypto exchanges.
3. Swap decentrally only with your own custody and your own bookkeeping. Only once the keys are secured and every swap is recorded with date and value is the decentralised route manageable. The tools from our overview of crypto tax tools and portfolio trackers help with the recording.

(As of October 9, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)