The decentralized finance market (DeFi) seems to be here to stay. This is confirmed by its trade volumes, which do not stop growing: during the second quarter of this year 2021, this young industry once again broke its own records.
One of the areas with the most growth Notable were the decentralized exchanges (DEX), which during the second quarter moved more than 400,000 million dollars , as shown by a Messari report focused on the review of the quarter 2-2021 .
The figure, corresponding to the trade volume of exchanges such as Uniswap, PancakeSwap or SushiSwap, among others, represents an increase of over 80% compared to the previous quarter . In that period, the volume reached barely exceeded 220,000 million dollars.
Although the increase between consecutive quarters seems quite high, when comparing the period between April and June with the same period, but of the The previous year, the jump is much more noticeable.
Between the second quarter of 2020 and this year there was an increase of 11,751% in the volumes moved by DEX , according to Messari records. In 2020, during those three months, trade on these platforms was barely around 3.4 billion dollars.
Although the total figure corresponds to the full quarter, the most decisive moment was the peak of activity that the cryptocurrency market experienced in May, just before the price drop that led BTC to lose up to 50% of its value in two weeks.
May alone accounted for more than half of the volume in the quarter, which, unsurprisingly , also marked the local top of the market.
More than 200,000 million dollars in a single month
Almost the same amount of money than during the entire first quarter of this year, then fall to less than half in June. Despite this drop, that month is currently the third with the highest volume in history, after May and last April.
Before this quarter that just ended, no month in history did DEX had moved more than 100,000 million dollars , with the maximum over 85,000 million set in February of this year.
Uniswap, protagonist among the DeFi
The DeFi exchange market has grown not only in volumes in recent months. Also new platforms have been added to the game. And although Uniswap was losing prominence compared to alternatives such as PancakeSwap, towards the end of the quarter they once again dominated around 54% of the total trading volume of DEX .
The Messari researchers highlight that this percentage of Uniswap dominance was not seen since November of last year. To a large extent, the report indicates, this rally was due to a mix between the fall of markets such as the Binance Smart Chain and the launch of Uniswap V3 , reported by CryptoNews , last March.
Decentralized exchanges vs. centralized
The data Hard of the amount of money circulating in the decentralized exchanges is striking, without a doubt. But another metric is perhaps more representative of the impact of DEX in recent times.
At the end of this second quarter, the value traded on decentralized exchanges exceeded the 10% equivalence of the volumes of centralized exchanges. And although it had happened before, it is striking that the previous time, when it even approached 20%, was in the middle of the DeFi boom , during the third quarter of last year.
Now, it has occurred amid a steep market crash and a decline in cryptocurrency speculation or trading after the May debacle.
Loan market, in free fall
The point of contrast during the quarter It was put by the loan platforms on DeFi: Aave, Compound and MakerDAO. In his report, Messari highlights that, despite the fact that the first half of the quarter there was a continuation of the momentum of the previous period, “the loan sector cooled down during the second quarter” .
The decrease in the amount of money deposited in decentralized loan platforms also occurred with the market crash in mid-May . This broke an upward trend that this market had been experiencing: from $ 25 billion in March to $ 45 billion before the full market fell along with bitcoin.
Up to that point, “investors were looking for Capture the exorbitant loan returns available across all loan protocols. ‘ But with the market crash and consequent ‘turmoil’, as Messari calls it, these investors ‘flocked to safer assets, causing a credit deposit collapse that wiped out growth entirely.’
Bright future for DeFi, predicts Messari
The DeFi ecosystem in general has had a similar behavior: mainly affected by the market winter since mid-May.
However, one of the highlights of the report’s data is one greater diversity in the world of stablecoins, with those based on decentralized ecosystems -such as DAI- gaining ground with respect to those that are centralized, such as tether (USDT), Binance USD (BUSD) or USD Coin (USDC).
Another element that seems to hold a promising future for DeFi is the constant development of new platforms, solutions and innovative business models, alongside the growth of projects already established in the world of cryptocurrencies .
For researchers, this development, added to the growing interest of institutions and large investors , completes the picture of a DeFi ecosystem with sustained growth in the following months and years.
In the quarters to come, DeFi is likely to have its moment of growth as scaling solutions arrive, institutions begin to dive into DeFi protocols, and ecosystems continue to mature, providing greater security for users.
In addition, investor confidence is expected to return to the cryptocurrency market . And for analysts, that various platforms continue to grow despite the current scenario, is a sign that the world of DeFi «will continue to advance, with each step, towards a system radically new open global financial system governed by code but built for people. ”