Uniswap has had another quarter solidifying its position as the largest DEX.
Signs of recovery in the late first quarter weakened as trading volumes failed to continue the upward trend seen in the second quarter. While centralized cryptocurrency exchanges have been the biggest losers due to increasing pressure from regulators, the resulting turbulent market conditions have not spared decentralized cryptocurrency exchanges.
The latest data collated by CoinGecko shows that spot trading volume on decentralized exchanges has plummeted by more than 28%. However, Uniswap has maintained its dominance in the space.
Decentralized Exchanges (DEX): Q2 Review
CoinGecko, a well-known crypto data aggregator, released its industry report, which stated that the spot trading volume of the top ten decentralized exchanges (DEX) totaled $155 billion in the second quarter of 2023. This is a drop of more than 30% from the first quarter.
Although the PEPE outbreak in the second quarter led to the recovery of memecoin, the trading volume of DEX did not show a significant increase. Compared with the CEX trading volume that fell by more than 43% month-on-month, the decline was much smaller.
On the other hand, Uniswap has consolidated its position as the largest DEX. Its trading volume accelerated in the first quarter due to regulatory restrictions in the United States and the banking crisis that led to the decoupling of the USDC stablecoin. This in turn triggered an influx of investors into decentralized exchanges, and even in the second quarter, investors continued to flock to the platform. Data shows that the dominance in May soared to 70%.
Furthermore, CoinGecko revealed that the launch of the crvUSD stablecoin did not have a positive impact on Curve, causing its trading volumes to decline. The report stated that stable swaps accounted for 11% of the market share at the end of June.
TraderJoe has witnessed a similar fate. The decentralized exchange based on Binance Smart Chain has also seen a decline in trading volume. Although TraderJoe was among the top 10 in the previous quarter, it only accounted for 0.3% of the market share at the end of the second quarter.
By chain segment
CoinGecko observed that despite Ethereum’s waning dominance, it remains the most popular chain for DEX trading, with a 57% market share. DEX trading volume reached $87.8 billion in the second quarter, accounting for 57% of all chains. The Ethereum blockchain fell by more than 44% month-on-month, when its trading volume was $158 billion and its market share was 74%.
In contrast, Arbitrum has performed significantly better, rising to second place with a 17% market share by the end of June. It is followed by Binance Smart Chain (BSC), which has a 10% market share during the same period, followed by Polygon, which ranks fourth in terms of transaction volume with a 6% market share.
As of June, the four major chains accounted for more than 95% of sales.