The historic crash of the FTX ecosystem has sent shockwaves across the crypto industry, with many feeling the heat of the collapse. However, some sectors of the digital asset ecosystem are witnessing their best market performance. One such sector is decentralized finance (DeFi).
DeFi Scores Massive Weekly Trading Volume
Amid the market turbulence triggered by the FTX scandal, decentralized exchanges (DEXs) are currently in one of their best runs as weekly trading volume hits $32 billion, as revealed by Dune Analytics.
However, Uniswap held the lion’s share of the trading volume, accounting for $20.9 billion of the total transactions over seven days. Furthermore, the November 8 trading volumes for Uniswap doubled from the previous day.
Over the past month, trading volume on Uniswap has averaged close to $1.3 billion daily, but the FTX bailout news saw the volumes shoot up to more than $4.2 billion.
It is not just Uniswap that has witnessed a surge in trading volumes; others like Curve recorded a whopping $1.3 billion rise from $700 million. Other small DeFi enterprises, like 1Inch Network, also announced their gains in the same period as others.
According to the Dune data, the network witnessed more than $5.3 billion in volume in the past week.
DEX’s Rising Popularity
As expected, decentralized exchanges have continued to gain fame due to their recent performance. However, this does not come as a surprise because history has shown that previous liquidity crises tend to trigger a broad “crypto winter,” otherwise known as a market correction.
Some notable digital asset lenders, like Vauld, Celsius, Hodlnaut, and Singapore-based Zipmex, have all halted withdrawals on their platforms, citing market conditions. However, “market conditions” is another way to say “not having enough liquidity to offset outstanding withdrawal requests.”
It is worth noting that all the crypto lenders mentioned above are now bankrupt. Furthermore, exchanges often employ freezing withdrawals in crypto to “stabilize liquidity.”
The decision by FTX to freeze withdrawals was taken after the firm failed to meet the $8 billion withdrawal requests in about 72 hours. Moreover, reports indicate that the FTX CEO, Sam Bankman-Fried, sought emergency funds before the bankruptcy filing.
DEXs are the answer to customers looking to avoid the risks of keeping their funds in centralized platforms. However, the one lesson about the FTX collapse is that the crypto industry is gradually turning away from its principle of decentralization.
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