Uniswap trading volumes plummet together …
Uniswap Trading Volumes Drop Along With DeFi Activity
Decentralized cryptocurrency exchanges (DEX) trading volumes have dropped 41% in the last 30 days, according to Dune Analytics..
At the end of August, the weekly DEX turnover reached a record $ 8 billion, and the September maximum was $ 6 billion. Since then, the value has dropped to $ 3 billion, or 62% from the peak. The decrease in volumes is also observed on the leading decentralized exchange Uniswap. On September 1, its turnover was approaching $ 1 billion, and yesterday it was equal to $ 234 million.
DEX Weekly Trading Volume Image: Dune Analytics
The popularity of the DEX skyrocketed in the summer amid increased traders’ interest in decentralized finance (DeFi). Protocols from this space continue to hold billions of dollars in their pools, but their growth has slowed over time..
“I believe DEX volumes are highly correlated with the overall DeFi market,” Johnson Xu, Research Director at Huobi DeFi Labs, told Decrypt..
The observed dynamics, according to him, can be explained by various reasons, but “one of the main ones is that people do not receive those crazy incomes as before, simply because they cannot persist for a long time and are often associated with significant risks.”.
“Now the market is returning to more rational levels, which leads to a decrease in trading volumes on the DEX. When the market has calmed down a bit, yields will adjust accordingly, reflecting a healthy consolidation, ”he added..
At the same time, the total volume of assets in DeFi remains quite stable. Thus, Uniswap’s liquidity has grown from $ 1 billion in mid-September to the current $ 3 billion. This phenomenon can be partially explained by the rise in cryptocurrency prices. However, the volume of Ethereum, Bitcoin and DAI on the exchange is also growing. At the end of August, Uniswap had 800,000 ETH ($ 381 million at the exchange rate at that time), and now it is 3.2 million ($ 1.3 billion). The amount of funds in contracts of all DeFi-protocols also increased and reached $ 12.3 billion.
“Participants in the DeFi space are still generating decent returns over traditional markets. Many projects from the field of profitable farming now bring 15-30% per annum. Some market participants continue to hold money in these relatively low-risk activities, ”Xu said..
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