DeFi is currently on everyone’s lips. Declining confidence in politics and banks, as well as luring interest rates of decentralized finances are attracting many new investors. Trading with the platforms‘ own tokens and the DeFi hype have now led to a new all-time high in the trading volume of decentralized stock exchanges.
Increasing popularity of decentralized stock exchanges (DEX)
One of the best known metrics for measuring the popularity of an exchange is the trading volume. Whenever one cryptocurrencies is traded against another, this contributes to the trading volume of the exchange. Many centralized exchanges operate so-called „wash trading“, where the exchange itself trades large amounts of money to appear higher in the rankings.
However, current developments show that a large number of centralised exchanges are not needed. This is because a strong increase in the popularity of decentralised stock exchanges (DEX) has been apparent for some months now. This is also reflected in the traded volume, as the data of Dune Analytics show:
As the chart shows, all decentralized stock exchanges have recorded enormous growth from the beginning of the DeFi hype at the end of May to the beginning of June. The total trading volume reached a new all-time high of $472,747,912 in 7 days and is well on its way towards $500 million USD. However, with the current hype surrounding the mostly Ethereum-based DeFi tokens, which are largely traded on decentralized exchanges, this should not take long.
The exchange with the highest trading volume within the last seven days is Uniswap with $165,333,793 USD. In the first week of June, the exchange managed to gain a market share of over 30% of all decentralized exchanges, followed by dYdX with 21.62% and IDEX with 16.45%.
Enormous increase compared to 2019
The growing popularity of decentralized stock exchanges becomes particularly clear when comparing the trading volume with the year 2019. While the trading volume in June 20109 was $325 million USD, in June 2020 it was already close to $1.4 billion USD before the end of the month. An increase of more than 400%. The chart shows the comparison of the individual months of 2019 (blue bars) with 2020 (red bars):
It is not only the decentralized exchanges that are pleased about the increase in trading volume, but also investors who invest in the Exchanges‘ own tokens. This is because they are recording enormous price gains and are performing significantly better than the tokens of centralized exchanges.