UPRETS Report ｜ DeFi in 2020：Comes to Exchanges as Uniswap Topples Coinbase in Trading Volume
2020 has been a dramatic and powerful year for the cryptocurrency space as a whole: Bitcoin’s crashes and surges, waves of new users, and changes in monetary policy seem to be paving the way forward for further growth of the crypto space.
However, there’s one part of the cryptosphere that’s charged ahead of all else: DeFi.
Indeed, Bison Trails chief executive and co-founder Joe Lallouz recently told Finance Magnates that “the pace of innovation in the DeFi space has been astonishing.”
“Two years ago, DeFi didn’t exist,” he said. “For all intents and purposes, DeFi was not a thing two years ago–it was just a few folks at a meetup who were talking about this idea that we could have finance that was built using smart contracting platforms and systems.”
Now, however, “new protocols, new pieces of technology that fit into the different protocols–everything from liquidity pools to automated market-making to lending to insurance: literally everything across the board is sort of being built in the decentralized finance space.”
This explosion of development has also been met with an explosion in the prices of some of the tokens that are associated with various DeFi protocols. To name just a few, Chainlink’s LINK, the Band Protocol’s BAND, and Compound’s COMP have all made headlines with their eye-popping price movements.
What’s driving the pace of DeFi innovation forward? What does it mean for the future of the cryptocurrency space? And is DeFi ready for the “mainstream” world?
Uniswap, a semi-automated platform for matching buyers and sellers of cryptocurrencies and other digital assets, saw its trading volume climb to $953.59 million on Tuesday, a more than ten-fold gain over the past month, according to the website uniswap.info. The 24-hour trading volume has crossed above $1 billion — at least 50% higher than daily trading volumes observed on Coinbase Pro, the largest U.S.-based centralized cryptocurrency exchange.
The rise of decentralized exchanges, or DEXs, represents a new chapter of this year’s boom in decentralized finance. The fast-growing ecosystem, known as DeFi, consists of automatic lending and trading platforms built atop distributed computing networks like Ethereum and constructed from open-source software and programmable cryptocurrencies. They aim to provide more-efficient and less-costly ways of conducting transactions currently handled by banks and traditional exchanges.
“It indicates that the DeFi flippening is real and already here,” Denis Vinokourov, head of research at the London-based prime brokerage Bequant, told CoinDesk in a Telegram chat. “Flippening” is crypto jargon, used loosely to indicate the hypothetical moment when one blockchain or digital-asset trend overtakes another.
Uniswap’s usage has grown so rapidly that it’s taken over the top spot among fee payers on the Ethereum network, where most of the DeFi development is taking place. The total value locked in the DeFi applications, the most common metric for measuring the activity, has increased 13-fold this year to about $9.2 billion, according to the data-tracking website Defi Pulse.
Uniswap has now moved into the top spot in total value locked, at $1.7 billion, CoinDesk reported Tuesday, while overall decentralized exchange volumes nearly tripled in August to $11.6 billion from July levels.
“As DeFi assets approach $10 billion, one narrative we may see is that crypto is a completely separate, new sphere of economics and finance,” according to a blog post Tuesday by Fintech Blueprint, curated by Lex Sokolin of the Ethereum-focused developer ConsenSys. “It does not need to connect to the old world. It simply needs to be left alone to perform.”
Traders on Uniswap have paid $5 million (10,805 ETH) in transaction fees in the past 24 hours, according to data source etherscan.io. That’s more than double the amount paid for transfers of the dollar-linked stablecoin tether (USDT), which had been the top contributor, according to ethgasstation.info.
Uniswap is designed to be more customizable than centralized exchanges like Coinbase. Instead of listing specific assets available for trading on the platform, traders can choose and list the tokens they want to transact in; currently the platform boasts more than 6,020.
And SushiSwap, a five-day-old unaudited project that’s an adaptation of Uniswap, has already moved into to the №3 spot of payers of Ethereum “gas,” which is the unit used to calculate fees for token transfers on the Ethereum blockchain.
“Those already trading on DEXs fully realize that growth will only accelerate,” Vinokourov told CoinDesk.
About UPRETS:
UPRETS is a platform focused on simplifying investment in real estate by advising on and digitalizing assets and securities.
We are dedicated to providing a convenient, legally compliant and advanced real estate digital securitization platform for property developers, asset owners and investors globally.
By utilizing our UPRETS platform, real estate developers and assets owners can create digital securities for their properties, providing investors with various low-barrier, secure and convenient forms of investments.
Backed by a publicly listed real estate conglomerate (NYSE:XIN) and our award-winning, patented blockchain technology, Xbolt, we bring a network, experience and luxury assets to the platform.
For more information about UPRETS,
visit https://www.uprets.io
LinkedIn: https://www.inkedin.com/company/uprets2019
Medium：https://medium.com/uprets
Twitter: https://twitter.com/uprets_io
Facebook: fb.me/uprets2019
