Decentralized exchanges continue to note massive growth in early 2021. Statistics by Messari confirm January will be the best month to date for most platforms. If successful, reaching a combined volume of $55 billion is not out of the question.
Decentralized Exchanges Keep Growing
The vast majority of cryptocurrency trading occurs on centralized platforms and through OTC markets. Until recently, decentralized exchanges were considered a niche without a real purpose. That situation has come to change for the better, as many users now trade on DEXes. The ongoing DeFi craze has something to do with this development, among other things.
New statistics by Messari paint an exciting picture for decentralized exchanges. The top platform is still Uniswap, but all “competitors” become more prominent. Combined, these trading platforms can generate up to $55 billion in trading volume this month. A significant amount, considering the overall volume recorded in recent months.
Assuming these statistics hold up, it is safe to say that decentralized exchanges will get on more people’s radar. Currently, these platforms primarily act as a gateway to accessing DeFi tokens at an early stage. Other than that, there are few trading pairs one won’t find on a centralized exchange.
The risks that DEXes pose cannot be taken lightly either. It is always possible a new token will suffer from a rug pull, costing traders thousands of dollars, if not more. Decentralized exchanges are permissionless, with no one in control. Such an approach allows for freedom, but it also requires users to take the necessary security precautions.
Uniswap Leaps Ahead
As is to be expected, the Messari data also confirms that Uniswap is preparing for a significant leap in trading volume. If this rate keeps up, the platform will process $5 billion in transactions. Quick calculations confirm this represents nearly half of the total volume across all decentralized exchanges.
The last time Uniswap saw a significant volume spike was in September 2020. At the time, the platform generated over $15.4 billion in volume. Even though there is more competition among decentralized exchanges now, it seems unlikely that any platform will threaten Uniswap’s position this year.
For those wondering if this will affect centralized exchanges, the answer is “no”. CEXes continue to grow in volume alongside their decentralized counterparts. As the daily trading volume surpasses $155 billion for all crypto-assets combined, the year 2021 will prove to be an interesting one indeed.