Altcoin Roundup: DEXs come to the rescue after China bans crypto


Over the previous few months, there have been some main developments popping out of China which have rocked the cryptocurrency market and the international monetary markets. China’s Evergrande debt repayment crisis despatched shockwaves all through international equities markets, in addition to the United States Securities and Exchange Commission’s (SEC’s) consistent signaling of upcoming regulation for stablecoins and decentralized finance (DeFi) continued to weigh on sentiment inside the market. 

While the Evergrande scenario considerably resolved itself, for the time being, the authorities crackdown on unregulated DeFi platforms and stablecoin transactions continues. This has resulted in cross-chain outfitted layer-one protocols and layer-two options seeing elevated volumes as merchants seek for non-centralized venues to work together with.

According to CryptoQuant CEO Ki Young Ju, after China introduced a ban on all cryptocurrency transactions, main cryptocurrency exchanges like Huobi suspended providers for accounts in mainland China.

This triggered an exodus of funds from Asia-based centralized exchanges (CEXs), and these funds had been ultimately deposited onto decentralized exchanges (DEXs) and the wider decentralized finance (DeFi) ecosystem.

This phenomenon is especially attention-grabbing and requires additional investigation, given the assumed failure of Ethereum’s London arduous fork in addressing untenable fuel charges and the regulatory considerations mounting over the U.S. and China’s response to cryptocurrencies.

Let’s check out a few of the latest thriving DEXs and well-liked protocols which are seeing a rise in inflows.

The Ethereum community

The Ethereum community is by far the most dominant sensible contract and it hosts the largest and most used decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI), in accordance to knowledge from Dune Analytics.

Monthly DEX quantity. Source: Dune Analytics

While the most up-to-date cryptocurrency ban out of China dominated headlines in the final two weeks of September, the announcement was originally made on Sept. 3, round the identical time that exercise on Uniswap surged increased.

Uniswap buying and selling quantity vs. whole income. Source: Token Terminal

As proven in the graph above, the spike in Uniswap’s exercise and buying and selling quantity really started on Aug. 28 and remained elevated above its earlier common for the subsequent couple of weeks.

Uniswap has additionally benefited from its latest integrations with the newly launched layer-two solutions Optimism and Arbitrum, which helped to decrease the transaction prices and pace up affirmation instances for customers on the community.

The Fantom community

The Fantom protocol has risen in prominence in latest months thanks to the launch of a bridge to the Ethereum community and a 370 million FTM developer incentive program designed to entice new initiatives to the Fantom ecosystem.

Data from Token Terminal reveals that whereas the announcement of the incentive program on Aug. 30 supplied an preliminary increase in protocol income and token worth, it wasn’t till after the regulatory announcement from China on Sept. three that exercise and protocol income actually skilled a sustained improve.

Fantom worth vs. protocol income. Source: Token Terminal

Fantom makes use of a directed acyclic graph structure that permits a excessive throughput functionality for near-zero charges, which has helped the protocol develop in recognition amongst DeFi and NFT merchants who had been priced out of conducting transactions on Ethereum.

SpookSwap and SpiritSwap are the two high DEXs on the Fantom community and collectively at present deal with a median of $95 million in 24-hour buying and selling quantity.

Avalanche

The Avalanche community is a blockchain protocol that has been gaining traction since its mid-August launch of the Avalanche Rush liquidity mining incentive program, which incorporates greater than $180 million price of rewards and incentives designed to entice liquidity to the DeFi ecosystem on Avalanche.

Avalanche worth vs. protocol income. Source: Token Terminal

Since the launch of the incentive program in mid-August, the protocol income and token worth for the native token AVAX have been on the rise as customers transferred property across-chain to interact in Avalanche’s rising DeFi ecosystem.

According to knowledge from DefiLlama, the high DEXs on Avalanche are Trader Joe (JOE) and Pangolin (PNG), which mixed at present see a median 24-hour buying and selling quantity of $355.2 million.

Decentralized perpetuals buying and selling

Decentralized perpetuals buying and selling protocol dYdX, which has exploded in recognition in September following the airdrop of its native DYDX token, has additionally seen an uptick in consumer exercise and volumes.

According to knowledge from Token Terminal, the every day buying and selling quantity on the trade exploded in the last days of September, surging from a median under $2.1 billion to greater than $9 billion on Sept. 27.

Total worth locked on dYdX vs. buying and selling quantity. Source: Token Terminal

The regulatory crackdown has been particularly arduous on spinoff and leveraged cryptocurrency exchanges like BitMEX and Binance, main to a rise in demand for decentralized choices like dYdX and Hegic.

While many throughout the cryptocurrency ecosystem lamented China’s crackdown on the crypto sector, their heavy-handedness might have really turned out to be a blessing in disguise. It prompted merchants to enterprise away from centralized exchanges and out into the quickly increasing DeFi ecosystem the place the ethos of decentralization and the means to “be your own bank” continues to be out there to those that search it.

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