Decentralized finance (DeFi) protocols had fabricated exponential growth in summer 2020. DeFi tokens and decentralized exchanges, DEXs, volume was on fire. In the third quarter of 2020, eight decentralized exchanges exceeded the $1 billion mark.
Based on TokenInsight recent report that provides market analysis, DEXs trading volume passed the $42.6 billion threshold during the third quarter, highlighting a surge of more than 1,100% compared to the prior quarter.
However, October witnessed a little pull back from the DeFi hype. The downturn ride of the DeFi sphere suggests user interest has turned back to Bitcoin as the price of leading cryptocurrency rallied abruptly. Bloomberg strategist Mike McGlone has posted a tweet, “annual average prices are on pace to reach $2,000 an ounce for gold and $20,000 for Bitcoin in 2021.”
Crypto Future Still Belong to Decentralized Exchanges
Decentralized exchanges such as Uniswap, 1inch, Curve Finance, and Balancer soar in fame during 2020 as several investors consider that centralized crypto exchanges basically operate in a fashion as conventional banks.
The main element that the report highlighted for this rally in volume is the “wealth effect” delivered by decentralized exchanges, which have provided open access to a “market between primary and secondary.” As indicated by TokenInsight, this useful feature provides normal user access to quality projects before they permeate through to secondary markets.
Furthermore, the growth of DEX changes the connection between token and centralized cryptocurrency exchanges. Earlier, this relationship was intensely slanted in favor of the crypto exchanges, which could charge premium fees to list digital assets.