DeFi and DEX volumes soar amid China’s crypto ban and US regulatory risk

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Last week, a sharp drop in cryptocurrency trading in China shocked the entire market as Bitcoin (BTC) and altcoin prices plummeted after the announcement, but as with everything else cryptocurrency related, the market is jumping again… Resilient Traders Found Other ways to participate in the market.

Part of China’s goal of limiting citizens’ ability to trade cryptocurrency appears to focus on preventing the use of cryptocurrencies and the growing decentralized economy (DeFi) ecosystem, but such maneuvers appear to have the opposite effect as price activity and token protocol. Projects like Uniswap and dYdX have seen an increase since the start of the crackdown.

There has been a significant amount of regional bitcoin flows in East Asia, according to Chainalysis, as indicated by the higher orange line in the chart below. This indicates that crypto holders in the region are shifting their assets in response to the strict regulation.

Bitcoin regional flows. Source: Chainalysis
As Chainalysis says, “Assets tend to move within a region, possibly due to the preferences of local exchanges, but flows between regions often occur as a result of regulatory concerns, geopolitical changes, or large swings in market prices.”

The lack of inflows from East Asia, along with crypto exchanges such as Huobi and Binance suspending services to Chinese nationals, suggests that funds are being held in the region rather than on central exchanges.

Related Topics: DEX Derivatives dYdX Overtakes Coinbase Spot Markets by Volume Among China’s R&D

Benefits of the DeFi ecosystem
Simultaneously with this growing movement taking place in East Asia, activity on decentralized exchanges such as Uniswap and dYdX has led to an increase in the exchange of decentralized derivatives as Chinese traders seek a safe haven for their crypto activities.

Uniswap trading volume vs total revenue. Source: Token Terminal
DYdX is a particularly useful data point, as it is currently the most widely used decentralized derivatives exchange and is seeing increased demand as regulators around the world have moved away from centralized exchanges in favor of a free KYC policy that offers derivative services.

According to Token Terminal, dYdX has been in the top five over the past week in several categories, including DYDX token price growth, total protocol revenue, commissions paid, price-to-sales ratio, and price-to-value ratio. he won. The stock market has also climbed into the top six when it comes to increasing total value booked.

Total income versus total value recorded at today’s date. Source: Token Terminal
A closer look at the available data also reveals that two and ten Ethereum competitors have also made some of the biggest gains in the past week, led by avalanche-based protocols such as Trader Joe and Pangolin, as well as Fantom. network.

Among other things, recent data shows that the decentralized financial ecosystem is operating as originally intended, giving cryptocurrency holders an unsupervised way to act outside the control and jurisdiction of financial authorities and regulators.

Source: CoinTelegraph

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