DEX landscape is growing irrespective of losses in the wider market.
It has been a trying time for the entire cryptocurrency market as the incessant rangebound price action continues to exhaust the bulls in lower rallies. Well, maybe not for the entire market. Decentralized exchange [DEX] volumes have been roaring despite market-wide rout, thanks to DeFi which continues to astonish with billions of dollars entering this new economy.
According to the latest report by Messari, DEX volume has not just increased a great deal in the second quarter of the year but has also outperformed the first quarter despite Bitcoin slashing half of its gains. As a matter of fact, DEX volumes in Q2 jumped to $405 billion, an increase of 117x year-over-year and an 83% increase since Q1 2021. To put things into perspective, May alone witnessed more than half the volume in the quarter.
Since then, the figures have halved. DEX volume in the month of June plummeted all the way to $95 billion. Despite the fall, June was still the third-highest all-time.
Race for the biggest DEX
Over the past several months, many decentralized exchanges have emerged. But Uniswap still takes the cake away. Its dominance over the rest of the market has reached a record-breaking 54% share of weekly volume, the platform’s highest level since November 2020. While its Binance Smart Chain-based PancakeSwap witnessed a dramatic spin as well with many speculating that it could soon flip Uniswap, the hype fizzled out with the launch of the latter’s V3.
Polygon plays its part
Polygon had humble beginnings. But today, it is a leading second-layer solution based on Ethereum. This rise to prominence has been crucial in devouring Binance Smart Chain’s [BSC] share of decentralized exchange volumes. Messari’s report also stated,
“As the party shifted towards Polygon, with its new set of tokens to speculate on and farms to harvest, BSC was squeezed out of the picture. The activity provided a great glimpse into the developing liquidity wars between blockchains, showing that when token incentives are the primary reason why capital enters a blockchain ecosystem, it will also be the primary reason capital leaves when incentives fall or incentives are more attractive elsewhere.”