Decentralized exchanges are slower and more expensive than their centralized counterparts, but traders love them more and more as time goes on.
The use of decentralized exchanges has been increasing over the years. As cryptocurrencies enter the business world, activity in this industry is growing rapidly.
Unlike a central exchange, a DEX (Decentralized exchange) does not have a central entity responsible for its processing. Instead, traders rely on a smart contract and the entire platform runs on the blockchain: This is usually happening on the Ethereum network.
This makes them slower and less efficient. But traders gladly embrace this temporary problem because among the many advantages, they do not need to comply with KYC requirements and other regulations and norms as well as those written in the smart contract, they are easier to list token and yield farming makes them interesting.
Decentralized stock markets are booming
The number of decentralized exchanges and the efficiency of each of these new platforms increased. According to Dune Analytics statistics, in January 2021, the trading volume on decentralized exchanges exceeded $ 63 billion for the first time.
This record is more than twice the rating recorded in September 2020, when the transaction volume in DEXs was close to $ 30 billion. This happened at the height of the DeFi boom.
According to Dune Analytics statistics, Uniswap is the undisputed leader in the industry, with over $ 25.8 billion in August. This figure contrasts slightly with The Block’s research that estimated more than $ 30 billion in action that month. Block’s research unit sets the record to $ 60.9 billion.
The second exchanges are SushiSwap, 0x and Bancor. Sushiswap controls about a quarter of the total trading volume on decentralized exchanges, 0x is 7.25% and Bancor is 7.1%.
The Dune Analytics dataset does not take into account statistics from the popular 1inch exchange, which increased by over 1000% right after listing.