Dex Volumes Plummet 37% After May
The trading volumes of decentralized exchanges (dex) have experienced a significant decline over the past four months. In March, the highest volume of dex trades for the year was recorded at $112 billion. However, in April, the volumes dropped by 47.26% to $59.06 billion.
May witnessed a slight increase of 12.59%, with trade volumes rising to $66.5 billion. Out of this amount, Uniswap’s dex trades contributed $33.67 billion. Since May, dex trade volume has been on a downward trend, experiencing a decline of 37.29%.
In August, the total dex trade volume was $41.7 billion, with Uniswap accounting for $24.87 billion (59.64%). Pancakeswap and Curve Finance also made significant contributions with $6.76 billion and $3.79 billion, respectively.
These three dex protocols constituted 84.94% of the global dex volumes in August, totaling $35.42 billion. Although September is not yet over, its dex volumes have been lackluster so far.
As of September 18, 2023, the global dex trade volume stands at $16.96 billion according to The Block. Uniswap trades contribute approximately $10.27 billion to this total, followed by PancakeSwap with about $3.14 billion and Curve with $1.07 billion.
Potential Decline in September
With only 12 days left in September, it is possible that dex trade volumes will fall below the numbers seen in August. This decline in volume is further emphasized in a monthly crypto recap report by digital asset manager Vaneck. The report highlights a decrease in onchain economic activity related to decentralized finance (defi) in August.
“Decentralized exchange volume experienced a more severe decline,” noted Matthew Sigel, Vaneck’s Head of Digital Assets Research.
Hot Take: Dex Volumes Face Ongoing Challenges
The significant decline in dex trade volumes since May raises concerns about the sustainability and attractiveness of decentralized exchanges. The decrease in trading activity may be attributed to various factors, including market conditions, regulatory uncertainties, and the emergence of alternative platforms.
To revive and maintain growth in dex volumes, it is crucial for the industry to address these challenges and provide users with enhanced liquidity, improved user experience, and increased security measures. Only by addressing these issues can dex platforms regain momentum and continue to play a significant role in the evolving landscape of cryptocurrency trading.
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