Hello everyone, there is a new child star on exchange for cryptocurrency, the so called DEX (decentralized exchange) are booming and in June they globally reached 1,5 billion in trading volume, Dune Analytics report a growth of 70% month on month , in may was 894,2 million Dollar.
This isn’t a isolated growth as in march the volume was 1,05 Billion but it is a tend that start to be visible and solid, this market (the DEX market) is still small compared to the CEX Centralized Exchange but give the trader more freedom and more autonomy as the found, in most cases, stay on private wallet giving the trader the right to own them private key without trust an exchange.
The June leader was Uniswap and Curve, the most astonishing growth was from Curve that pass from 38 million till 340 million Dollar month on month, anyway there are also other actors on this rising universe that make some noise, DyDx for example is a different kind of exchange that give the ability to the most advanced trader to operate with margin trading, in this case the fund will be locked for obvious reasons, the asset locked are changing from month to month much faster than other exchange as the nature of this kind of trading.
For DyDx the margin position must be closed in maximum 28 days, just the pair BTC/USD is a perpetual contract.
Looking at the newest subject we can name also Balancer, that sees a record trading volume of 93 million in June versus the 3,6 million of the month earlier, this impressive growth show how much interest there is on this new way to trade crypto asset.
As any young business there are some risk and some concern on the security side, notably for the DEX that use locked asset such as Balancer that was victim of an hacking that see a lost of around 500,000 Dollar, the company make a statement that all funds lost will be repay to the owners, so far they didn’t say when but as the volume locked (the hack worth 0.36% of the cryptocurrency locked) and the monthly trade we may think that this issue will be deal in a short time.
Decentralized Exchange are a revolutionary experiment and the volume was so far a weak point of this kind of business as when you want to trade one asset you need a counterpart that would cover your sale, also a scares volume make the spread bid ask to high for certain pairs, this was always a big issue for those that wish to exchange some more than average amount of money.
With a growing adoption of this kind of exchange we may expect that the volume issue would be no more a problem, by the way there are other kind of barrier, in my opinion most of this exchange are not really simple to use and the everyday trader must feel confused at the start, but also this problem may disappear with the evolution of the business and the mass adoption, finally the security will be something to work on, in special way for the kind of subject that operate with cryptocurrency locked in pools.
That’s all for now, thanks for reading and hope you enjoy this post, always remember to do your own research before investing.
Still very small but a couple more months of growth >50% and it will compete with the biggest ;)