The conversations surrounding the decentralized finance [DeFi] realm might have taken a backseat with the rise in prominence of Bitcoin, but when it comes to the second-largest cryptocurrency, Ethereum, deFi continued to hold a special place.
Despite a significant price appreciation, Ethereum investors were found to be with withdrawing their assets from centralized exchanges. Data from the crypto analytic platform, Glassnode revealed that the amount of fees on #thereum spent on ETH deposits to centralized exchanges took a plunge from approximately 25% in 2017 to less than 1% according to the current.
Interestingly, almost all fees spent on transactions involving centralized exchanges in the past several months were used for ETH withdrawals. In short, there has been an overall decline with respect to Ethereum user activity on centralized exchanges.
Gauging from the receding activity of Ethereum users on CEX over the last couple of months, it can be noted that the trend could have been bolstered due to rising gas fees on Ethereum.
Additionally, Ethereum locked in deFi protocols had hit a major slump when the figure took a dive from 8.867 million ETH to 6.692 million in the last week of November. The TVL began trending upwards as deFi has once again managed to gained momentum.
DEXs have produced a compelling case for the users and developers alike. However, repeated cases of security breaches and loopholes, the community has, time and again, questioned the protocols seeking to take advantage of the growing hype by advertising impressive returns while blatantly neglecting to perform security audits. Due to its contentious nature, decentralized finance space has been touted as either a bubble or the greatest wave of innovation the the world ever seen in finance.
DeFi Grabs Headline
The number of individual addresses involved with deFi is now greater than 1.046 million, according to data compiled on Dune Analytics. While the rise in addresses does not correspond to rise in the number of individuals or firms, since a person may have more than one address, it, however, depicted a monumental rise as deFi’s popularity rose.