Is Uniswap reaping people off

[YellowSwap]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

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[Orpichukwu]

On a centralised exchange, what you are conducting is an on-chain transaction where you don't need to pay any fee for such transactions to be completed; only the trading fee is to be charged, which is always not up to 1% of your trading amount.
 
But on Uniswap, you are interacting with the network. First, you need to approve the token for it to be available for swap on Uniswap. With that approval alone, you will be charged for the gas fee, which is on Eth. And after that, before you can confirm your swap on Uniswap, you also need to pay another fee in order for the transaction to be completed. You pay a two-time fee before you can complete a swap on Uniswap.

[tyz]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

Decentralized exchanges are not made for exchanges of small amounts. The main difference is that with a decentralized exchange, an actual transaction takes place on the blockchain. And this costs (a lot), depending on the chain. The fees are usually even higher because the transaction has to take place within a short period of time. The fees are relatively high for Eth and Bitcoin in particular. However, there have also been phases with ETH where you pay up to $100 for a transaction on Uniswap. With centralized exchanges, there is no actual blockchain transaction during the exchange. Only the amount is deducted from one user in a database and credited to the other. The costs are therefore significantly lower.

[highalch]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

Simply because that's how Ethereum works. Interacting with a smart contract on Ethereum requires more gas because of more data throughput and more computation needed. That said, DEXes will always be more expensive on Ethereum than a classic centralized exchange, unless you transact with very large amounts. In return, you get decentralization.

[batang_bitcoin]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

You've noticed it late already. I've used uniswap before but stopped because I can't bear the fees for each trade that I make. There is no solution for that or just find some other dex that are in smart contract with other chains that have lesser fees than ethereum (ERC20).
Because I doubt it that it will later on decrease as that has been there for so long, so if you trade small there, you're just letting the network eat your money alive.

[Mate2237]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

I used it last and the transaction fee was too high so after successfully transferring the coins from there I left the app and refused to use it again. Normally, though for once I have used the Centralized Exchange transaction fees are cheaper than the Decentralized Exchanges. And that is one the factors that I am not using Decentralized Exchange for any transaction for now. And their prices are lower than CEX.

[FatFork]

Are DEXs suppose to be more costly normal centralized exchanges?

Yes. DEXs like Uniswap are almost always more expensive to use than centralized exchanges.  That's mostly because DEXs work differently behind the scenes. They use an automated market maker (AMM) system to match orders and let users directly trade with each other using smart contracts instead of a company's servers.  To make those automatic trades happen, the network needs to use more computational power and that costs more in gas fees.  So while DEXs give people more control over their money, that freedom isn't free.  You've gotta pay the price with higher fees.  Whether it's worth it depends on what you value more - privacy and control or cost.

[icalical]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

With Centralized Exchange you are not actually interacting with the blockchain network, the fee was defined by the exchange and on CEX you only charged with trading fee there is no blockchain transaction fee. But with decentralized exchange you are actually interacting and using the Ethereum Blockchain so the fee was affected by the network condition. What you could do is checking the average transaction fee on the blockchain before doing any transaction on the DEX.

[nelson4lov]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

This is not an inherent problem of Uniswap. The cost of sending ETH directly from one wallet to another is about 21,000 gas limit and after final calculations[1]:

Code:

gas limit * gas price 

So whenever you want to do smart contract operations, it costs more because more EVM opcode are being used for the operations - hence the reason why it is expensive. Using Uniswap on Layer-2 chains will effectively combat this. EIP 4844 will soon be implemented and fees on layer2s will see 60-80% cut in transaction fees.

[1] Ethereum Yellow paper: https://github.com/ethereum/yellowpaper

[2] https://eips.ethereum.org/EIPS/eip-4844

[highalch]

This is not an inherent problem of Uniswap.

I'd also highlight that you can in fact transact on Uniswap for extremely low prices, the key is to use a different chain (Polygon, Arbitrum, Optimism etc.)

USDC/USDT on UniV3-Polygon for example has 0.01% fee, and usually around 1 dollar cent transaction cost. Slippage is also not an issue in most cases.

[o48o]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

Well using erc20 contracts is expensive, and this is nothing. Just few years ago swapping fees in uniswap went to $50+ . If current one is too expensive, you should use L2 versions in uniswap, like polygon, arbitrum, and optimism. That's why they were developed in the first place. Until ethereum scales, if you are not swimming in money you should look for alternatives to use for bad days.

And yes, DEXes definitely are more expensive then cexes. There's a literal price to pay if you want to use decentralized services.

[livingfree]

Always check the gas price for the transactions because they're incredibly high and you may just want to use other chains to save those fees when you trade.

This is not an inherent problem of Uniswap.

I'd also highlight that you can in fact transact on Uniswap for extremely low prices, the key is to use a different chain (Polygon, Arbitrum, Optimism etc.)

USDC/USDT on UniV3-Polygon for example has 0.01% fee, and usually around 1 dollar cent transaction cost. Slippage is also not an issue in most cases.

I agree, there are other chains that a trader can use to have lesser fees and won't be hurting your pocket every time you trade there.

~ https://support.uniswap.org/hc/en-us/articles/11045742405517-How-to-switch-networks

[JeffBrad12]

the high fee coming from the ethereum blockchain itself its not mistake on the part of uniswap, you see swapping requires a lot of gas to be executed and if the gwei is increasing ever so highly you will definitely know automatically that executing swap will definitely costs a lot more, the thing with CEX is that the process of trading or swaping is done off chain its done within the exchange platform that was why its being called cex in the first place, therefore they can flexibly set the fee based on their own preference but you can't do so with dex, since the transaction happened directly on chain then you can only rely on the gas fee to write data to the blockchain and if its ethereum, its no new thing that this blockchain have highest fee, sometime it even hits few hundred dollars just to execute some smart contract so its no wonder, the dex itself usually have reasonable fees.
so basically its the fault of ethereum to be having that much fee, mainly because it lacks in scalability to overcome the ever increase transactions.

[MusaMohamed]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

You have to consider tax rate from a token project. It is an extra fee and it comes from a project with their own policy to charge their users for any token transactions. Uniswap is only a DEX and they have their own swap fee policy.

When you swap a token on a DEX, there are two fees: DEX swap fee, token's tax fee that depends on each project team. Tax fee is common with inflationary tokens like GameFi, Metaverse tokens because those project teams really want to reduce token inflation as much as possible. Tax fee will help them to do this but after charging tax on users, what they will do with it is unknown.

They can use tax fee for token buy back and burn or other things.

[peter0425]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

same experience in Exodus recently that I even spend more than 10 dollars for exchanging Bitcoin into different currency and i thought this was just because of the  congestion but is there really a relation?
that's why Nowadays I prevent myself for  a while in exchanging instead I directly use Binance instead of other wallets/exchange.

[tsaroz]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

As people already explained, there is significant differences on how CEX and DEX works. Most of the trades in centralized exchanges are just adjustment on balance sheets and no real transaction occurs. But when you are doing a exchange in Decentralized exchange it could go through one or multiple transactions. And I agree that Ethereum network is about unusable, when it comes to DEX, I prefer to use BSC, many exchange even allow ETH (BEP token) withdrawal to BSC wallets.

[Kelward]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

I used it last and the transaction fee was too high so after successfully transferring the coins from there I left the app and refused to use it again. Normally, though for once I have used the Centralized Exchange transaction fees are cheaper than the Decentralized Exchanges. And that is one the factors that I am not using Decentralized Exchange for any transaction for now. And their prices are lower than CEX.

This is precisely why CEX are more patronized than DEX, because centralized exchanges are more convenient and has cheaper transaction fees for smaller transactions than the decentralized exchanges, as is obvious from the OP unfavorable experience. People are advocating for DEX but with this Uniswap, being a reputable DEX high fees for small transactions it's not helpful, only favorable  for big transactions.

[tbterryboy]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

With Centralized Exchange you are not actually interacting with the blockchain network, the fee was defined by the exchange and on CEX you only charged with trading fee there is no blockchain transaction fee. But with decentralized exchange you are actually interacting and using the Ethereum Blockchain so the fee was affected by the network condition. What you could do is checking the average transaction fee on the blockchain before doing any transaction on the DEX.

So, the fee on DEX depends on the network condition? But I don't think the ETH network is congested. And there are now lots of alternatives to it which many people use the most because the fees on them are cheaper and then they are also faster than in ETH. But, the first thing that you said seems legit and might be the reason on why transacting on DEX is more costly than the CEX.

There is what we call a gas station for ETH where we can check the fee but before we initiate a transaction in a DEX, there will still be pop up telling if how much fee it will cost us to complete the transaction. I prefer this, and I still can decline it if I don't like what I see on my screen.

[kentrolla]

That's how ETH network works and as the cost of transactions are higher due to higher gas fee in DEXs and now that's the area where centralized exchanges has advantage as the transaction fee is way too lower compared to DEX and to be honest most of the casual users or short term investors will prefer CEX over DEX for this particular reason and thus you will see most of those who do regular trading or smaller transactions do not use DEX but if you are trading huge amount and don't want any trouble of centralization then DEX is the best option. Unfortunately that's how it works.

[xeqoRameshAxueamExaqana]

I have withdrawn and trade ETH from MEXC multiple times already and I am never charged more than $3 but when I swap ETH ERC 20 on Uniswap the gas fee is almost always $10 and few times over $10, why is it like this? Are DEXs suppose to be more costly normal centralized exchanges?

high fees at dex because of the high eth fees, at the dex direct exchanger direct transactions send from the buyer's or seller's funds are subject to fees you send are also subject to fees.
while in a centralized exchanger, the fee is when you deposit, you will be charged a large fee if you use eth. while the trading fee is low. and you withdraw it later in the form of USDT not on the eth network so the fee is also low. if you withdraw it using the eth network too, the fall regarding fees will be the same whether dex or a centralized exchanger.