Uniswap, the most widely used decentralized exchange (DEX) on Ethereum, topped Coinbase in daily volume on August 30th. The explosive growth of the Decentralized Financial Market (DeFi) has put many investors enthusiastic against DEX rather than centralized exchanges.
According to Uniswap, the platform has processed $ 426 million per day. Coinbase Pro was worth $ 349 million during the same period, according to data from CoinMarketCap.
Why is Uniswap growing so popular so fast?
The total cost of the DeFi protocols has jumped from $ 1 billion to $ 7.7 billion since June, according to Defipulse.com.
After the wave, there were many little tokens related to DeFi, especially tokens of governance. Before being listed as centralized exchanges, they usually operate on Uniswap, as they do not require approval from the central government.
For example, when yearn.finance (YFI) was first published, it was traded on decentralized exchanges such as Uniswap. Then it hovered Poloniex, FTX, and finally the Binance symbol.
Many DeFi tokens for small and medium businesses are actively trading on Uniswap, especially those that are not listed on major exchanges.
The abundance of DeFi tokens on Uniswap, combined with the rapid expansion of the DeFi market, has been a catalyst for Uniswap’s exponential growth. Hayden Adams, the creator of Uniswap wrote:
“Wow, Uniswap’s 24-hour turnover exceeds Coinbase for the first time ever. Uniswap: $ 426 million Coinbase: $ 348 million It’s hard to express just how crazy this is.”
The increase in user activity on Uniswap also coincides with a significant increase in the volume of daily Ethereum transactions.
The Ethereum blockchain explorer Etherscan shows that the number of Ethereum transactions increased from about 435,000 in January to more than 1.1 million in August.
Daily transactional activity on the Ethereum blockchain is approaching 2018 levels for the first time in two years. At the time, ETH topped $ 1,400 on Coinbase, a full-time high.
Will DeFi’s Obsession Continue?
The growth rate in the DeFi market has increased so much that “collecting” DeFi coins can be more profitable than mining. As Tim Swanson, Director of Marketing at Clearmatics said:
Ethereum mempool has over 150,000 transactions, and even a “slow” commission is around $ 10. This might sound like a lot of dollars to miners (compared to other time periods), but the return on collecting DeFi coins may be higher, even with periodic losses. ”
The dynamics of the DeFi market alone and the size of Uniswap indicate that the rally in the DeFi market is showing no signs of slowing down.