- Decentralized exchanges and derivatives markets like Uniswap and dydx experience a surge in trading volume and fees.
- However, the tokens of both these protocols do not see much growth. Whale interest and price witness a decline.
The crypto community’s trust in centralized exchanges has slowly been declining over the last few months. The decline in interest in these CEX’s was kickstarted by the fall of FTX and has been exaggerated by SEC’s lawsuit against Coinbase and Binance.
Due to this, many users have been moving to decentralized solutions for their needs.
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Is the future decentralized?
Token Terminal’s data revealed a significant surge in trading volume within the decentralized derivatives market and exchanges. Uniswap and dydx emerged as the primary facilitators of this increased activity and volume.
The surge in trading volume on the dydx protocol can be attributed to the substantial growth in unique addresses on the network. Artemis’ data highlighted a material increase in the number of addresses in recent weeks, contributing to dydx’s overall growth.
Source: Artemis
This surge in volume could further translate to increased revenue for dydx, as indicated by Token Terminal’s data. This indicated an 84.9% increase in fees generated by the protocol in the past week. However, the Total Value Locked (TVL) on the protocol experienced a 4.1% decrease during the same period.
Source: token terminal
Similar patterns were observed on the Uniswap protocol, with fees generated increasing by 34.9% in the last week. In congruence with dydx, the TVL on the platform witnessed a 5.9% decline during the same period.
Uniswap’s situation could improve if its NFT marketplaces witnesses increased activity. Dune Analytics’ data further revealed a significant drop in transactions on Uniswap’s NFT marketplace in recent months. Attracting more users to this marketplace would positively impact Uniswap’s TVL.
Source: Dune Analytics
The launch of Uniswap v4 also holds promise for attracting new users. Hints from Uniswap and its founder Hayden’s official Twitter account suggested the upcoming release of Uniswap v4. The success of this launch will play a vital role in shaping Uniswap’s future trajectory.
Realistic or not, here’s UNI’s market cap in BTC’s terms
— Uniswap Labs 🦄 (@Uniswap) June 9, 2023
How are the tokens doing?
Recent weeks have seen notable price declines for both dydx and Uniswap tokens. These price corrections aligned with a decline in whale interest, which likely contributed to the adjustment in token prices. However, the velocity of these developments continued to surge suggesting that transaction activity of the tokens remained high.
Source: Santiment