Trading volume on major DeFi-platforms up 180% in two days

Total daily volume of trading on 3 leading decentralized exchanges increased by $950 million in 48 hours

Average daily trading volume on the three largest decentralized exchanges (DEX) has jumped 180% in the past 48 hours, according to CoinMarketCap. Trader activity on centralized exchanges (CEX) has also increased.

Trading volume on Uniswap v3 (Ethereum) rose from $322 million to $999 million, and on Uniswap v3 (Arbitrum One) from $152 million to $322 million and on Curve (Ethereum) from $54 million to $157 million. These three exchanges account for 55.6% of total DEX trading volume in the past 24 hours. Within two days, their total trading volume increased from $528 million to $1.47 billion (180%), an increase of $950 million.

At the same time the trading volumes at 12 large centralized exchanges also remained at maximum values for the second day in a row over the last month. As of the morning of June 6 it reached $105 billion (the highest since April 28), while on the morning of June 7 it was $97 billion, according to Coinglass. During the last month, volumes have only twice reached $100 billion. And on average, they have ranged from $30 billion to $80 billion.

The surge in exchange activity comes as the U.S. exchange regulator has begun litigation against leading cryptocurrency exchanges.

Our experts note that currencies reacted with a sharp drop. But by June 7, they had recovered to the marks where they were before the reports about the filing of lawsuits by the SEC.

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Trading volume on DEX has reached a maximum in 10 months

The growth of traders’ activity on DEX platforms in March is one and a half times higher than in February. This comes after the bankruptcy of U.S. banks and regulatory pressure on centralized cryptocurrency exchanges.

Trading volume on decentralized exchanges (DEX) reached a ten-month high. For the first time since May 2022, according to DeFiLlama, the figure rose to $133.3 billion in March, up 53% from $86.9 billion in February.

Trading volumes on decentralized exchanges topped $145 billion in May 2022, following the collapse of TerraUSD (UST) and Luna tokens. And then declined to $65 billion in October. The bankruptcy of the FTX exchange again caused an increase in trading volume on DEX – in November it was $113 billion. And then again for three months did not rise above $87 billion.

A surge in cryptocurrency trading on DEX platforms began in March after Silvergate Bank announced it was shutting down operations. For example, in the week following the news of the bank’s problems alone, trading volume on DEX was $50.2 billion, which was also the highest since the Terraform Labs token crash.

This was followed by the collapse of Signature Bank as well as a warning from the SEC to Coinbase. And the Commodity Futures Trading Commission (CFTC) lawsuit against Binance. At the end of a difficult month for the cryptocurrency industry, trading volume on DEX exceeded $133 billion.

Our experts note that Curve ($4.78 billion), Uniswap ($4.06 billion) and PancakeSwap ($2.33 billion) are leaders among decentralized exchanges in terms of total value locked (TVL).

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How decentralized crypto exchanges depend on the SEC

A wave of repression by U.S. exchange regulators is affecting the companies behind development of decentralized crypto exchanges. Review by Crypto Upvotes experts

The cryptocurrency exchange dYdX, one of the most popular DeFi trading platforms. It is on its way to becoming a fully decentralized project, not the least of which is the policy of the U.S. government. Right now it’s running on a hybrid decentralized model. But in September, developers plan to launch a new version of it. This should help reduce the influence of centralized structures, on which it still has to rely.

The exchange depends at least on the dYdX Trading behind its development and StarkWare’s solutions for scaling trading capabilities on the Ethereum network. In the new version, dYdX will run on the Cosmos blockchain and leverage its own protocols. This is to minimize reliance on centralized links, any of which could potentially be pressured by regulators.

Decentralized finance (DeFi) projects are characterized by the absence of intermediaries for trading or loan transactions in crypto-assets. An automated protocol, the smart contract, plays the role of an intermediary. However, as in the case of dYdX, the development of this protocol is the responsibility of a specific company and team of developers.

Most DeFi projects issue their own tokens, which are traded on cryptocurrency exchanges. After the head of the U.S. SEC Gary Gensler said. that almost all existing crypto-assets are considered securities by the agency, any token issuer potentially falls under the agency’s oversight.

Repressions from the SEC of epic proportions

Speaking to community members during a conference call on March 30. The head of another decentralized exchange, SushiSwap, Jared Gray. Said he “stopped getting inspired” by his work. Gray spoke candidly about his attitude towards American regulators. In particular, he mentioned Senator Elizabeth Warren’s campaign platform, which included a total ban on cryptocurrency transactions in the United States. Politico published an article about Warren, saying in the headline that she was “raising an army against cryptocurrencies.

The week before, Gray revealed that he had received a subpoena from the SEC regarding his involvement with SushiSwap. To fund the impending lawsuit, Gray brought a proposal to the exchange’s existing Decentralized Autonomous Organization (DAO). In it, he proposed setting aside $4 million from the Treasury of the Record to create a “Sushi DAO Legal Defense Fund.”

“This is about an onslaught and retaliation of epic proportions, and it’s only going to get worse,” warned former SEC official John Reed Stark in a commentary for Bloomberg. Stark served as a senior adviser to the agency. And headed the Internet enforcement offices. He observed that regulators initially left market leaders untouched, focusing on easy-to-access projects. But now they’re targeting the big players as well.

What’s already happened this year

Also earlier this year, the SEC sued the cryptocurrency exchange Gemini because its Earn. Which allows users of the site to earn interest from lending their tokens. The service then fined Kraken exchange $30 million, while equating its stacking service with making money from unregistered securities. Later, the agency banned Paxos from issuing the BUSD token. It was second only to Tether’s USDC and Circle’s USDC in terms of capitalization.

In late March, the SEC accused Tron blockchain founder and Huobi exchange co-owner Justin Sun of artificially inflating trading volumes on the exchange. Just the same day, Coinbase received a notice from the SEC. It threatened to sue over a number of tokens and financial products available on this platform.

Full decentralization is needed to save crypto exchanges

Decentralized exchanges are already passing Coinbase in terms of trading volumes. Uniswap reached $71.6 billion in March, according to The Block Research. This is 45% higher than Coinbase’s $49.4 billion in the same month. Among traditional crypto exchanges, Coinbase is second only to Binance in terms of volume.

Summing up the results of the first quarter of this year Coinbase representatives wrote. That the trends on the exchange reflect a larger market. The actions of the SEC and CFTC only underscore the uncertainty surrounding Ethereum and other altcoins.

Referring to the Coinbase situation, in an interview with Bloomberg, dYdX head Antonio Giuliano says. About more and more cryptocompanies refusing to actively engage with regulators in the U.S. against the backdrop of what is happening. His company, dYdX Trading, will continue to work on the protocol after the launch of the new version of the exchange.

According to Giuliano, the network on which the next version of dYdX will run will work with multiple transaction validators. This is to minimize the risks of being banned or censored, to which the centralized mechanism is subject. The exchange will not technically have the ability to reject or censor transactions.

Our experts believe that the final form for everything in DeFi should be complete decentralization !

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Trading volume at SushiSwap crypto exchange increased 50% for one week

Growth in volume is due to development of SushiSwap ecosystem and announcement of important developments and innovations in 2023. Crypto-Upvotes expert review

Trading volumes on decentralized crypto exchange (DEX) SushiSwap increased by 50.8% to $476 million during this week.

During the same period, competitors’ trading volumes decreased: on PancakeSwap – by 42%, on Uniswap – by 8.1%. And the Curve platform lost 3.8%. All Dex fell 9.67% over the week to $18.2 billion.

SushiSwap is a decentralized crypto exchange on the Ethereum blockchain. The trading floor allows market participants to conduct transactions with digital assets directly from their cryptocurrency wallets – without intermediaries. DEX gets its liquidity from pools, which receive funds from platform users who lock their assets in protocol.

Growth in trading volumes at SushiSwap is taking place against an active development of its ecosystem. On Jan. 16, the head of this project, or as the community calls this position, “chef.” Jared Gray presented plans for the organization in 2023, including the goal of making Sushi a leader in DEX.

The SushiSwap team plans to launch a DEX aggregator in the first quarter of this year. And to open a decentralized incubator, Sushi Studios (a platform for launching new crypto projects). A number of other new services, including the NFT marketplace Shoyu, are also in development, according to Gray’s report.

On Jan. 25, it was reported that the developers of SushiSwap would launch a decentralized futures exchange on the Sei Network blockchain. According to journalists, this will expand Sushiswap’s capabilities by linking the project to non- Ethereum-based systems.

Our experts point out that new trends in the crypto market are forcing developers of DeFi-services to adapt to them in order to keep their positions. In addition to launching new products in 2023, SushiSwap recently introduced the “xSwap” solution for simple token exchange between networks. And also Furo Streaming, a service that automates regular distribution of funds to multiple addresses.

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Funds outflow from CEX exchanges has intensified. What will it lead to?

Our experts told us what consequences may arise due to reduced liquidity on CEX exchanges. And how it will affect cryptocurrency prices

FTX exchange collapse caused a significant outflow of funds from centralized platforms. According to analytical platform CryptoQuant, after November 6, when it became known about problems FTX. CEX exchanges users withdrew 200 thousand BTC ($3.35 billion). As well as about 2 million Ethereum ($2.4 billion) and nearly $3 billion in Stablecoin.

For example, from Binance, users withdrew 81.7 thousand bitcoins ($1.35 billion) in just six days, or more than 15% of the total amount of bitcoins on this exchange. However, the head of Binance, Changpeng Zhao, called the surge in withdrawals small and explained that this is normal during a fall in cryptocurrency market.

Where do cryptocurrency owners transfer their funds?

Ordinary investors experience panic when there are some problems on centralized exchanges and market in general. And has a great desire to hide his funds to feel more relaxed. According to him, users primarily withdraw assets to decentralized wallets.

Means in these purses can not only store, but also exchange on the decentralized exchanges (DEX). After FTX started having problems, the number of such transactions increased dramatically.

In the last 24 hours alone, trading volume on DEX exchanges has increased by 38.66%, according to data from the CoinMarketCar platform.

Currently, the leading DEX platforms are Uniswap (v3), Curve (Ethereum), and PancakeSwap (v2). According to our analysts, daily trading volume on the first of them is more than $908 million, on the second and third – $170 million and $150 million, respectively.

In addition to decentralized storage, cryptocurrency owners began to take an active interest in hardware wallets. In the past week, revenue from the sales of Trezor devices grew by 300%. And competing company Ledger also recorded a significant surge in demand for its devices.

Reduced liquidity in CEX exchanges and the whole cryptocurrency market in general, what can it lead to?

Crypto market is now driven by investors’ fear of losing their investments. Reduced liquidity of crypto market and general pessimism mean a further decline in value of cryptocurrencies.

This process has a negative impact on the crypto market, it “slows” it down. This means it is not worth waiting for the recovery yet. Growth of crypto market can be forgotten for a while, now the main thing is not to fall even deeper.

However, our experts believe that cryptocurrencies are unlikely to hold out. The crypto market has not yet realized the scale of the disaster. Lack of liquidity leads to a decrease in trading volume. And hence, the profitability of trading platforms deteriorates greatly.

Large scale capital outflows can lead to a domino effect. One company is followed by collapse of other companies that are connected by common transactions. Some cryptoprojects have already reported financial difficulties caused by the collapse of FTX.

For example, crypto exchange AAX suspended withdrawals and said it lacked liquidity to continue operations. And cryptocurrency lender BlockFi is preparing a bankruptcy filing.

The next two weeks will show how serious the situation in cryptocurrency market is. According to our analyst, new bankruptcy filings will mean a massive collapse of the whole crypto industry.

Participants of trading on CEX exchanges may find it difficult to sell some coins quickly

This could happen because the outflow of assets from such exchanges reduces the volume of liquidity on them. Most likely, popular coins like Bitcoin, Ethereum and Stablecoin will not be affected. But some altcoins traded in tandem with Bitcoin or ether may suffer, according to our expert. Their liquidity will be low. This means traders will prefer not to deal with such liquidity. And prices for these altcoins will go down, largely due to the lack of active trading on exchanges.

“It’s a market, it’s all interconnected. The churn is mostly in Bitcoin and Stabelcoin, and all other pairs are losing liquidity,” explains our expert.

Traders can now pay attention to native coins DEX-exchanges. In addition, our expert noted that DEX crypto wallet tokens may also show growth in price.

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