Year-to-date, decentralized exchanges (DEXes) trading volumes rose 144 percent as per the latest DappRadar report released on July 2, 2020. Most noteworthy was the sharp spike in UniSwap’s trading volumes which rose 6x year-to-date as Kyber Network, spurred by recent upgrades not only attracted new traders but witnessed a 2.2X increment within the same period.
Ethereum Decentralized Exchanges On A Roll
Decentralized exchanges, unlike centralized exchanges (CEXes), adopt a different architecture.
By ridding out the middle man and promoting the use of non-custodial wallets, the trader is solely responsible for his/her funds thereby eliminating counter-party risks. Though its throughput is directly dependent on the base layer’s speed (for an exchange whose order book is embedded on chain), they are comparatively slow and can’t scale as desired.
Still, one of its main drawer—despite its lag, is the associated security and the absence of Know-your-Customer (KYC) compliance.
With CEXes subjected to devastating hacks in recent times, the rise of DEXes is definitely a move in the right direction.
As they evolve by making their user interfaces easy to use even for beginners, their trader count (which rose on average by 50 percent) and therefore trading volumes (a measure of liquidity) is on the rise.
$10.2 billion worth of Value Locked In Ethereum
DappRadar also noted that Ethereum—even with its low throughput, dominates as the preferred DEX and DeFi platform.
For instance, of all the active wallets in blockchain, those from Ethereum held $10.2 billion in value, more than 2X those in Tron, and 5X those of EOSIO. The Most active DEXes are launched from Ethereum and DEXes are the second most active contributors of value in Ethereum after Stablecoins. This is even in the background of increasing network fees.
Compared to Bitcoin, the amount of fees collected by Ethereum miners in the last day continue to rise and is more than double those of Bitcoin as noted by analytic firms.
On the flip side, increasing trading fees seem to be bludgeoning gaming and marketplace activity. Year-to-date, gaming and related activity shrunk 79 percent as only 2,000 ETH addresses remain down from 10,000 in Q1 2020.