Uniswap processed $15.3 billion in monthly volume in September, outpacing Coinbase and signalling that DeFi is here to stay.
Data from Dune
Analytics shows that in the month of September Uniswap decentralized
exchange processed $15.371 billion in volume. In the same period,
reports indicate that Coinbase processed $13.6 billion.
Monthly decentralized exchange volume. Source: Dune Analytics
The
significant spike in Uniswap’s volume can be attributed to two major
factors. First, the explosive growth of decentralized finance (DeFi) and
yield farming of governance tokens caused decentralized exchanges to
thrive. Second, the launch of Uniswap’s governance token UNI led to a frenzy on the platform.
June marked the start of a frenzy in DeFi governance tokens, with Compound’s COMP token kickstarting the phenomenon.
The process is relatively simple: DeFi users “farm” new governance tokens by staking various cryptocurrencies, such as Ether (ETH).
DeFi
protocols that release their underlying governance tokens in a
decentralized manner distribute them over time to users who stake.
Once
users successfully farm the new tokens, they typically hold them until
they can be sold at centralized exchanges but sometimes the token’s
market cap is too small.
Top cryptocurrency exchanges
have to consider various factors before listing tokens. Some of the
criteria include liquidity, track record, and developer activity. For
new governance tokens or DeFi-related cryptocurrencies, it is nearly
impossible to meet those requirements.
Hence, Uniswap
eventually evolved into the go-to platform to trade DeFi tokens and as
the total value locked in DeFi surged it intensified the growth of
Uniswap’s volume.
Is DEX volume a one-off or a trend?
Uniswap
first surpassed Coinbase Pro in daily volume on Aug. 30. Since then, it
has continuously remained competitive with the top U.S. exchange. In
late August Uniswap creator Hayden Adams said:
“Wow,
Uniswap 24hr trading volume is higher than Coinbase for the first time
ever. Uniswap: $426M, Coinbase: $348M Hard to express with how crazy
this is.”
The consistently high volume from
Uniswap occurred despite a considerable slowdown in yield farming and
the governance token craze. This suggests that the uptrend of
decentralized exchanges maintaining high volume is sustainable over the
long term.
Decentralized exchange active users. Source: Digital Assets Data
In
the last few weeks the prices of DeFi tokens dropped and user activity
in yield farming space declined but researchers at Dune Analytics are
not interpreting this as a bearish signal. The researchers said:
“Despite
yield farming craze calming down DEX volumes crushed old records in
September: $24B traded, up 100% from August. While last few weeks were
down from beginning of month, all weeks in Sept were well above peak
week from August.”
Ethereum analysts,
including Ethhub founder Anthony Sassano, said it also reflects the
overwhelmingly positive sentiment investors have for Ethereum. Sassano said:
“They
told you that decentralized exchanges on Ethereum were a fad - they
were so incredibly wrong. DEXs did $23.5 billion worth of volume in
September alone! Betting against Ethereum has and always always will be a
bad move.”
source link : https://cointelegraph.com/news/defi-craze-propels-uniswap-monthly-volume-to-153b-surpassing-coinbase
