According to CoinDesk, the U.S. dollar-Japanese yen (USD/JPY) pair has overtaken the bitcoin-dollar pair (BTC/USD) as the most traded on the decentralized finance (DeFi) leveraged trading platform Gains Network. Initially released on Polygon and later on Arbitrum, Gains Network enables users to trade financial derivatives of cryptocurrencies, foreign exchange, and commodities by matching buy-sell orders using smart contracts.
In the past 24 hours, the USD/JPY pair registered a trading volume of $21.64 million, nearly 40% greater than BTC/USD's $15.51 million and the highest among all assets, according to data from Dune Analytics. GBP/USD is the third most traded pair, with EUR/JPY taking the fifth spot. The dollar-yen pair is also the fourth most traded of the past seven and 30 days. These figures indicate a growing interest in trading traditional markets over DeFi rails.
However, the daily turnover in the global foreign exchange market is worth over $7 trillion, and bringing a significant portion of that market onto a decentralized platform is easier said than done, considering scaling issues. Early Thursday, some traders took sizeable leveraged short positions in USD/JPY and EUR/JPY pairs on Gains' Arbitrum-based platform, betting on appreciation in the Japanese yen. These market participants may expect the Bank of Japan to intervene in the foreign exchange markets to halt the yen's slide. The yen bulls have faced disappointment this year, with USD/JPY rising 14.7% to 150.00. The way USD/JPY options have been priced recently suggests expectations for wild swings in the exchange rate.
