2 - 4 minute read
Last month, Uniswap (UNI), a decentralized exchange (DEX), emerged as the market leader in terms of trading volume, surpassing Coinbase (COIN), the largest centralized exchange (CEX), as traders turned to DEX amid regulatory crackdowns and a banking crisis that caused key stablecoins to depeg from their $1 peg.
According to CCData, Uniswap facilitated more than $70 billion of trading in March, exceeding Coinbase’s $49.2 billion trading volume. The surge in DEX trading volume coincided with an overall 10-month high in DEX volume.
Coinbase had a rough month in March as the US Securities and Exchange Commission (SEC) informed them of their pursuit of an enforcement action due to violations in securities law. This news affected their trading volume and market share.
The collapse of Silicon Valley Bank (SVB) also had an impact on the DeFi market. Two key parts of DeFi, Circle Internet Financial’s USD coin (USDC) and MakerDAO’s DAI, depegged from their $1 peg, leading to a flurry of trading activities in DEX. Uniswap emerged as the top DEX during this crisis, facilitating $13.3 billion of trading on March 11, whereas Coinbase had only $1.7 billion.
According to CCData, Uniswap has previously seen big spikes in trading activities like this during times of turmoil, only to see things quiet down. This suggests that Uniswap’s lead over Coinbase may not be sustained for long.
Impacts on the Asset
As traders shift to DEX amidst regulatory crackdowns and market uncertainties, Uniswap’s rise to dominance underscores the potential growth of decentralized finance. The surge in trading volume on Uniswap also indicates the high demand for liquidity in the market.
However, traders must also be cautious of the burstiness of DEX trading activities. Uniswap’s lead over Coinbase may not be sustained for long, and the surge in trading activities is likely to subside eventually.
Traders should keep an eye on the regulatory developments in the market and make informed trading decisions based on the volatility of the asset.