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DEX Volumes Saw Over 1000% Rise in Q3 before the DeFi Boom in October

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According to a recent report, the third quarter of 2020 saw the volume of decentralized exchanges (SEX) rise to $42.6 billion, which marks an increase of 1,132% from last year’s third quarter.

But the September highs recorded were pulled down in October, as Bitcoin prices began increasing. This captured the interest of traders following the DeFi boom of the past few months.

In July, the volumes reached $5 billion, which is a third higher than the highest level during the second quarter. And monthly volumes increased throughout the third quarter, with an average monthly rise of more than 140%.

The share of volumes still concentrated

However, volume shares between the competing DEX remained high in the hands of a few DEXs. Uniswap carried out about 50% of the entire transactions while the three major agencies shared three-quarters of the volume.

Interestingly, eight DEXs had more than $1 billion trading volume in the third quarter, which was a big statement considering none of the exchanges reached that level of trading volume in the previous quarter.

Rise in Ethereum DeFi Tokens Leads to Increasing Crypto Lending Volumes

Reports reveal that the “wealth effect” offered by the DEXs is one of the main driving force towards the increase in trading volume. It has created an expansive market between the primary and secondary traders.

DEX increasingly growing in importance

TokenInsight reported that it has allowed the average user the ability to access high-quality projects before they reach the secondary market, which has been more pronounced during the DeFi boom.

Also, the increase in the importance and significance of DEX is changing the way centralized exchanges relate to token projects. In the past, the relationship was one-sided in favor of the exchanges, since the listing of tokens requires large payouts.

But DEX is providing a more balanced market, where projects can succeed without relying heavily on major centralized support, as was the case in the past.

Even with the third quarter gains DEX trading volume gains, they are still representing a tiny fraction of the general market trades. According to the report, DEX takes only 1.24% of the total spot market, which means they have a wide margin to cover.

It’s clear DEX still has a long way to go in the spot market, the recent rise as well as the DeFi boom has given traders the strong heart that there are better days ahead in the market.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.

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