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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Hacker who stole $160 million decided to make money on them by adding them to liquidity on DEX Curve

Curve protocol developers say that no one can forbid anyone to make deposits. And the platform code is unchangeable

A cryptocurrency hacker has become the leader among liquidity providers in Curve Finance’s DeFi-platform pool. In doing so, using the $160 million he stole from the Wintermute protocol.

Wintermute is a major cryptocurrency market maker, providing liquidity to more than 50 crypto platforms. Such as Binance, Kraken, Coinbase and many others were attacked in September 2022. Ninety different digital assets totaling about $160 million were withdrawn from the protocol.

The attacker placed the stolen funds in the Curve Finance trading pool. These assets now represent 28% of the roughly $400 million placed in Curve’s decentralized liquidity pool, Curve 3pool.

Curve is the largest decentralized crypto exchange (DEX) deployed on the Ethereum network. According to DeFiLlama, its Total Value Locked (TVL) is about $4.5 billion.

Also Curve allows users to trade digital assets without intermediaries. They trade tokens through liquidity pools. Another part of the users provides this liquidity, for which they are charged a commission.

The liquidity providers get a small commission every time someone uses the pool to exchange tokens. The Curve 3pool platform is focused on exchanging stablecoins Tether (USDT), USD Coin (USDC) and Dai (DAI).

Because the code of Curve protocol cannot be changed after its deployment in the Ethereum blockchain. Its creators have no control over who uses the protocol or provides liquidity in the pools.

Our experts point out that even the managers of the protocol cannot change the code where the funds are stored. DEX exchange officials also noted that it is impossible to disable protocol without completely shutting down the Ethereum blockchain.

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DEX Merlin had more than $1 million stolen immediately after Certik audited its code

The DEX Merlin hack occurred despite a positive assessment from leading Certik specialists who analyze the code of blockchain projects.

On the morning of April 26, hackers withdrew about $850,000 worth of USD Coin Stablecoins (USDC) from Merlin. As well as several other relatively illiquid tokens. The data in the blockchain shows that a certain entity was able to withdraw the funds. Who controlled the exchange’s liquidity pool. This may suggest that the attack was not technically sophisticated. And the theft itself may have been the work of an insider of this project.

The attack occurred despite the fact that Merlin was audited by Certik. Which is the market leader in auditing the software code of blockchain projects. The service’s conclusion from the Merlin audit stated that there were “no critical bugs” in the exchange’s code.

Certik representatives wrote on social media that they are investigating the incident. Their initial findings point to a potential problem with the management of the project’s private cryptographic keys giving access to funds. “An audit can’t completely prevent problems with keys. But we always call projects’ attention to best practices,” Certik said.

Merlin developers have asked users to revoke the permissions of wallets connected to its site. They say they are analyzing a possible vulnerability in the protocol.

Matter Labs is behind the development of the zkSync “second-tier” blockchain. In November 2022, it led several investment rounds totaling $258 million with LightSpeed, Andreessen Horowitz. And major crypto venture capital firms Blockchain Capital and Dragonfly.

Our experts note that Merlin is considered a potential candidate for token distribution in the form of an airdrop for activity in its ecosystem projects, which include the hacked Merlin platform.

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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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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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Telegram founder Durov announced plans to launch a DEX exchange for trading cryptocurrencies

Founder of Telegram announced plans to launch a decentralized platform for trading digital currencies. Our experts told us how successful this project could be. And whether its development will be hindered by regulators

The next step in development of Telegram is the creation of decentralized tools. Including cryptocurrencies, as well as decentralized cryptocurrency exchanges, Pavel Durov said on November 30.

“This is how we can correct the mistakes caused by excessive centralization, which has failed hundreds of thousands of cryptocurrency users,” wrote the head of Telegram.

He explained that the blockchain industry was built on the principle of decentralization. But it turned out to be concentrated in the hands of a limited circle of individuals abusing their power.

“As a result, many people lost their money when one of major crypto exchanges FTX went bankrupt,” Durov recalled.

He said the solution to the problem is for blockchain projects to return to decentralization. And users should switch to transactions and wallets that do not depend on any third party.

The founder of Telegram said that he and four other people launched a decentralized domain name auction platform Fragment in five weeks. It is based on the blockchain platform TON, which Durov called fast and efficient enough to host popular apps. At the same time, Durov criticized Ethereum, calling it outdated and expensive, even after the latest global network upgrade.

“Fragment is amazingly successful. In less than a month the platform has sold $50 million worth of user names. This week Fragment will go beyond user names,” Durov said.

How will regulators treat Telegram cryptoexchange?

In terms of resources and the existing experience of Telegram team in developing TON project. Creation of such a project as a decentralized exchange and cryptocurrency wallets seems realistic, our experts believe. However, the current global trend in regulation of cryptoassets turnover is tightening and streamlining of control requirements.

Since details of this project and specifics of functioning of announced project are not disclosed. At the moment, it is difficult for our experts to assess how it will meet the requirements of the legislation of different countries.

What are the future prospects for this Telegram project?

Decentralized crypto exchanges are difficult to regulate because they are essentially not companies. Therefore, it is legally possible to prohibit such exchanges, but it is more difficult to limit their activities. Our expert stressed that liability in case of using such exchanges from the legal point of view does not apply to their creators. It extends more to ordinary users in each specific transaction.

Our experts admit the possibility that the launch of this site may be timed to the lifting of SEC ban. Which is imposed on Durov until July 2023 because of the attempted launch of the TON platform with the participation of investors from USA.

Most likely, the new DEX exchange will not be connected to Telegram in any way. Except for simplified authorization and a number of mechanics. Otherwise, they are definitely two different products.

What risks will ordinary users face when using a new DEX exchange from Telegram?

Most likely, DEX exchange will be created on TON blockchain. The main advantage of a decentralized platform is that it does not store users’ cryptocurrency. The exchange only brings together buyers and sellers of digital financial assets, without intermediaries. And users do not need to open an exchange account for such transactions – transactions are made from investors’ wallets.

That is, there is no risk of losing their funds if the exchange decides to block them. As, for example, happens now with the centralized exchanges, which go bankrupt.

The only risk of participation in transactions on the decentralized exchange is the risk of losses due to delays in price updates. And you will need to pay a commission for transactions on that DEX exchange.

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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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