DEX Volume Plunges 50% Since November

Steep Drop Shows AMMs Are Losing Steam

By: Samuel Haig Loading...

DEX Volume Plunges 50% Since November

In a sign that Automated Market Makers may be falling out of fashion, activity on decentralized exchanges has plummeted by roughly half since November, according to data from Token Terminal. Moreover, dYdX, the orderbook-based leverage DEX has usurped Uniswap’s dominance over decentralized exchange trading in recent months.

Aggregate DEX volumes are on track to tag their lowest level since August 2021. Only $110B has been traded on decentralized exchanges this month so far, while August of last year was host to $123B in DEX volume.

November Peak

Decentralized exchanges were surging in the run up to last November’s market peak, with roaring volume on Uniswap v3, PancakeSwap, and Curve driving the sector’s aggregate volume to new all-time highs. Combined DEX volume peaked at $309B in November.

But it has since plunged by 48%, with decentralized exchanges hosting $160B in March.

Monthly DEX volume. Source: Token Terminal

While Uniswap peaked with nearly 78% of all DEX volume in October 2020, the platform’s monthly dominance has trended below one-third during all of 2022. DYdX has grown to 43% from 24% this year.

DEX volume dominance. Source: Token Terminal

The TVL of DEXes has also pulled back since November. It is currently $43B, down 19% from its peak.

Bobby Ong, co-founder and COO of CoinGecko, told The Defiant that the pull-back in trading has been observed across both decentralized and centralized trading platforms.

Weaker Volume

“Trading volume for the top 10 CEX and DEX have been on a steady decline since Nov 2021,” Ong said. He also noted that decentralized exchanges have consistently represented roughly 9% of volume on the top 10 platforms over the past two quarters.

Data from CoinGecko shows that volume across the 10 leading exchanges plunged by 52% between November and February, with February posting weaker volume than any month in 2021. Quarterly volume also slumped by nearly 38% between Q4 2021 and Q1 2022.

Monthly combined trade volume on 10 largest crypto exchanges. Source:CoinGecko

The decline in trade activity coincides with a sizable pull-back in the price of crypto assets.

Ethereum is down 38% since November, currently trading at $2,997 after peaking above $4,812 according to CoinGecko. Bitcoin has similarly slumped 40% from its all-time high. DeFi blue-chips has suffered heavier losses, with MakerDAO and Aave both down 46%, Uniswap has shed 48%, and Synthetix has crashed by 50%.

CoinMarketCap data shows that the combined capitalization of crypto assets has also slumped 34% since November.