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Trading volume on Uniswap has surged as users flock to DeFi markets
USDC trading on DEXes has hit a new high
The overall negative sentiment surrounding FTX and CEXes has caused a resurgence in DeFi activity
Recently, crypto analysts have noticed a surge in the trading volume of the top decentralized exchange (DEX) – Uniswap. Users have been burning Ether on both Uniswap V3 and V2 rigorously in the last 7 days. This activity has led to the burning of more than 2300 ETH, thus making the second largest cryptocurrency deflationary. Users burned 117.51 ETH on Uniswap V3 and 34.46 ETH on V2 in the past day alone.
The crypto community is speculating that the loss of faith in centralized exchanges is driving Uniswap’s popularity after FTX fell into a liquidity crisis last week. In fact, the recent negative sentiment around centralized exchanges has caused activity on DEXes to touch back old highs.
Due to the loss of trust in CEX, the trading volume of Uniswap increased, V3 and V2 burned more than 2300 ETH in 7d, which has caused ETH to fall into deflation. MEV robotics activity has recently peaked. The number of addresses trading USDC in DEXs also hit a new high.
— Wu Blockchain (@WuBlockchain) November 14, 2022
A lot of activity has also been noticed in the MEV bot trading sector on Uniswap as well. It suggests that investors are spending resources to gain high profits; thus making DEX’s foundation stronger. The scenario is opposite to what is happening in the open market. Investors are pulling out holdings, and exchanges are facing liquidity issues. It might suggest that like the centralized market, the crypto space is also going through micro changes that are hard to notice immediately.
DeFi Rally Amid CEX Winter
Nevertheless, the only winner amid the current liquidity crisis is decentralized finance. A spike in users and transaction activity has been noted across DEXes in the past week. For instance, as per Nansen.ai, dYdX’s user base jumped 97% in the past 7 days, while the number of transactions spiked 145%.
The people like decentralised finance pic.twitter.com/e3acOCs5gI
— Nansen Intern 🧭 (@nansen_intern) November 14, 2022
There has also been a rise in the number of addresses trading USDC on DEXs. However, it might not be a great sign as the users of the accounts are yet to be identified. Nevertheless, the move after Tron’s USDD stablecoin lost its peg might suggest that investors are desperately attempting to save the USDC stablecoin from depegging.
For the same reason, some users are speculating that these incidents might be happening as a result of the ripple effect in the market. So far, crypto enthusiasts have learned that sudden movements in the market amid a winter cycle might not be a sign of hope.
Although, others felt that the moves were not significant and it is the market acting on its infamous volatility.
Uniswap’s Journey This Year
The Uniswap DEX has had an interesting year as it has witnessed both new highs and lows in terms of trading volume. In March, the exchange reported the lowest trading volume in the DEX’s history recorded since September 2021. It plunged by 5% in just 31 days. It also witnessed a complete reversal of the scenario when its trading volume surpassed $1 trillion and its average value surged from $200 to $2400 in May.
At press time, Uniswap’s TVL was noted at $3.8 billion, with a 24-hour trading volume of $1.3 billion.
