Decentralized exchange volumes slump for six months to lowest levels since January 2021 Decentralized exchange volumes slump for six months to lowest levels since January 2021
DEXs trading volumes had soared during the first quarter of the year before the current decline.
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Updated: Oct. 2, 2023 at 3:52 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Trading volumes on decentralized exchanges (DEX) have slumped for six consecutive months to their lowest levels since January 2021.
Volume on DEXs decreased to $44.28 billion in September, the sixth consecutive monthly decrease and the lowest recorded volume since January 2021, according to DefiLlama data.
During the first quarter of this year, DEXs experienced a surge in monthly trading activity. This growth was precipitated by increased regulatory scrutiny directed at their centralized counterparts, including major platforms like Kraken, Bittrex, Coinbase, and Binance.
As a result of these regulatory measures, crypto traders migrated their activities towards DEX protocols. In March, trading volume on these decentralized platforms reached an impressive $140 billion. However, this spike was short-lived, with volumes plummeting to around $82 billion in April.
Subsequently, trading activities on these DEXs have been on a consistent decline.This decline can be attributed to a combination of factors, including overall market conditions and the ongoing regulatory pressures facing the industry.
For context, the U.S. Commodity Futures Trading Commission (CFTC) filed charges against three DeFi protocols, including Opyn, Deridex, and ZeroEx. The regulator alleges they illegally offered unregistered derivatives trading products on their platforms.
Additionally, these platforms have regularly been victims of hacks and exploits, making it difficult for users to trust them with their assets.
Uniswap remains the dominant decentralized exchange platform despite the falling volume across the board. The protocol contributes more than 38% of the daily volume, and its cumulative volume is three times higher than its closest rival, PancakeSwap.
Meanwhile, trading activity on centralized crypto exchanges is also seeing a downturn. According to available data, trading volume on these platforms fell by 26% to $311.93 billion in September, marking the lowest level since November 2020.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.
Bittrex
Founded in 2014 by three cybersecurity engineers, Bittrex is a global leader in the blockchain revolution.