The decentralized exchange Pangolin, the Uniswap of the Avalanche blockchain, is having its biggest week to date, and the week isn’t over.
According to the exchange’s analytics, it’s closing in on $900 million for the week, already doubling last week’s volume of $425 million, which had also been by far its biggest week.
From the end of May to mid-August, volumes had been much lower, seldom coming close to $50 million for the week. For many weeks prior to that, however, it had consistently run more than $100 million in weekly volume. Pangolin launched in February.
Image via Pangolin’s analytics.
Pangolin’s rise is yet another sign non-Ethereum DeFi is picking up as traders chase yields and seek low transaction costs. It’s also another example of how effective token incentives are in driving liquidity.
Like Uniswap, Pangolin is an automated market maker (AMM), a decentralized exchange where users trade with tokens pooled on the app itself, rather than getting matched with a counterparty, like on centralized exchanges.
The entire Avalanche ecosystem has been on a tear this week as the smart contract blockchain announced Avalanche Rush, a liquidity mining program giving $180 million worth of its AVAX token to early supporters of applications running on Avalanche. The money market Benqi swiftly broke a billion dollars in total value locked, thanks in part to liquidity mining incentives.
In fact, Pangolin is offering bonus liquidity mining rewards to users that provide liquidity to two pools that feature Benqi’s token, QI: the PNG-QI and AVAX-QI liquidity pools.
As a new crop of users chase the best yields, they are doubtless swapping tokens heavily as they try out a new set of applications in a new ecosystem.
Arrington XRP Capital founder Michael Arrington told The Defiant via text message that the Pangolin DEX is “probably the center of all the farming activities on Avalanche right now. Most users are farming their token of choice and harvesting via Pangolin. We’ve seen a similar dynamic play out in other ecosystems.”
According to CoinMarketCap, Pangolin’s token, PGN, was trading at $2.91 in the late afternoon Thursday, falling off sharply from its 24-hour high of $4.55, but still well above mid-August, when it traded around $1.13.
Avalanche Rush just started. If more known decentralized finance applications open up on Avalanche and compelling new projects launch there, this could be only the beginning for volume growth on Pangolin.