In recent months, China has seen some important events that have shaken the cryptocurrency market and global financial markets. The Evergrande payout crisis in China caused unrest in global stock markets, and consistent signals from the US Securities and Exchange Commission (SEC) about forthcoming regulation of stacked coins and decentralized finance (DeFi) continued to indicate market sentiment.
Although the Evergrande situation is somewhat resolved, the government’s attacks on unregulated DeFi platforms and stablecoin transactions are ongoing. This has resulted in team 1 protocols and cross-chain team 2 solutions increasing in volume as traders seek decentralized arenas to interact.
After China announced a ban on all cryptocurrency transactions, major cryptocurrency exchanges such as Huobi have ceased operations in mainland China, according to CryptoQuant CEO Ki Yong Joo.
This triggered an outflow of funds from Asian Centralized Exchanges (CEX), and these funds were eventually invested in Decentralized Exchanges (DEX) and the broader Decentralized Finance (DeFi) ecosystem.
This phenomenon is particularly interesting and requires further investigation given the alleged failure of the London fork in Ethereum in the handling of volatile gas taxes and regulatory concerns over the US and China’s response to cryptocurrencies.
Let’s take a look at some of the latest thriving DEXs and popular protocols that are seeing an increase in influx.
According to Dune Analytics, the Ethereum network is by far the most dominant smart contract and hosts the largest and most widely used decentralized exchanges such as Uniswap (UNI) and SushiSwap (SUSHI).
DEX volume monthly. Source: Dune Analytics.
Although the recent ban on exporting cryptocurrencies from China has dominated the headlines for the past two weeks in September, the announcement was originally made on September 3, around the same time as activity on Uniswap increased.
Uniswap trading volume versus total revenue. Source: Token Terminal
As shown in the chart above, Uniswap activity and trading volume actually began to rise on August 28 and remained above the previous average over the following weeks.
Uniswap has also benefited from the latest integrations with recently released second-tier solutions Optimism and Arbitrum, which have contributed to lower transaction costs and accelerated confirmation times for users on the network.
The Phantom Protocol has become prominent in recent months with the launch of a bridge to the Ethereum network and a 370 million FTM developer incentive program designed to bring new projects to the Phantom ecosystem.
Token Terminal data shows that while the announcement of the incentive program on August 30 gave the first promise to protocol revenues and token prices, it was only after China’s official announcement on September 3 that protocol activity and revenues really grew significantly.
Phantom price versus protocol revenue. Source: Token Terminal
Phantom uses a targeted acyclic graph architecture that provides high throughput with almost zero fees, which has contributed to the protocol becoming popular among Defi and NFT traders who have been denied the opportunity to trade on Ethereum.
SpookSwap and SpiritSwap are the two best DEXs on the Fantom network and currently handle an average of $ 95 million in 24-hour trading volume.
The Avalanche Network is a blockchain protocol that has been in use since the launch of the Avalanche Rush Liquidity Incentive Program in mid-August, which includes over $ 180 million in rewards and incentives to bring liquidity to the Avalanche DeFi ecosystem.
Landslide price against protocol income. Source: Token Terminal
Since the release of the incentive program in mid-August, protocol revenue and the value of the original AVAX token have risen as users transferred assets down the chain to participate in the growing DeFi Avalanche ecosystem.
According to DefiLlama, the best DEXs are on Avalanche Trader Joe (JOE) and Pangolin (PNG), which together currently have an average 24-hour trading volume of $ 355.2 million.
Decentralized eternal trade
DYdX decentralized perpetual trading protocol, which rose in popularity in September after the fall of the original DYDX token, has also increased user activity and volumes.
According to Token Terminal data, daily trading volume on the stock exchange rose sharply in recent days in September, rising from an average of less than $ 2.1 billion to over $ 9 billion on September 27.