Information from Dune Analytics exhibits that within the month of September Uniswap decentralized trade processed $15.371 billion in volume. In the identical interval, experiences point out that Coinbase processed $13.6 billion.
Monthly decentralized trade volume. Supply: Dune Analytics
The numerous spike in Uniswap’s volume will be attributed to two main elements. First, the explosive development of decentralized finance (DeFi) and yield farming of governance tokens induced decentralized exchanges to thrive. Second, the launch of Uniswap’s governance token UNI led to a frenzy on the platform.
June marked the beginning of a frenzy in DeFi governance tokens, with Compound’s COMP token kickstarting the phenomenon.
The method is comparatively easy: DeFi customers “farm” new governance tokens by staking varied cryptocurrencies, corresponding to Ether (ETH).
DeFi protocols that launch their underlying governance tokens in a decentralized method distribute them over time to customers who stake.
As soon as customers efficiently farm the brand new tokens, they usually maintain them till they are often offered at centralized exchanges however generally the token’s market cap is just too small.
Prime cryptocurrency exchanges have to contemplate varied elements earlier than itemizing tokens. A number of the standards embody liquidity, monitor file, and developer exercise. For brand spanking new governance tokens or DeFi-related cryptocurrencies, it’s practically unattainable to meet these necessities.
Therefore, Uniswap finally developed into the go-to platform to commerce DeFi tokens and because the complete worth locked in DeFi surged it intensified the expansion of Uniswap’s volume.
Is DEX volume a one-off or a pattern?
Uniswap first surpassed Coinbase Professional in each day volume on Aug. 30. Since then, it has repeatedly remained aggressive with the highest U.S. trade. In late August Uniswap creator Hayden Adams stated:
“Wow, Uniswap 24hr buying and selling volume is increased than Coinbase for the primary time ever. Uniswap: $426M, Coinbase: $348M Arduous to specific with how loopy that is.”
The constantly excessive volume from Uniswap occurred regardless of a substantial slowdown in yield farming and the governance token craze. This implies that the uptrend of decentralized exchanges sustaining excessive volume is sustainable over the long run.
Decentralized trade energetic customers. Supply: Digital Belongings Information
In the previous couple of weeks the costs of DeFi tokens dropped and person exercise in yield farming area declined however researchers at Dune Analytics usually are not deciphering this as a bearish sign. The researchers stated:
“Regardless of yield farming craze calming down DEX volumes crushed previous information in September: $24B traded, up 100% from August. Whereas previous couple of weeks had been down from starting of month, all weeks in Sept had been nicely above peak week from August.”
Ethereum analysts, together with Ethhub founder Anthony Sassano, stated it additionally displays the overwhelmingly constructive sentiment buyers have for Ethereum. Sassano stated:
“They advised you that decentralized exchanges on Ethereum had been a fad – they had been so extremely fallacious. DEXs did $23.5 billion price of volume in September alone! Betting towards Ethereum has and at all times at all times shall be a nasty transfer.”