Decentralized Crypto Exchanges Traded at $ 1.5 Billion in June

Kataryna Kovtun July 2, 2020


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In June, trading volume on decentralized crypto exchanges reached a record high of $ 1.52 billion, up 70% from May figure, the latest Dune Analytics report said.

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Decentralized Exchanges are a Trend

A powerful trend is emerging in the market, which emerged at the end of 2019, it was he who determined the double-digit growth indicators in the last reporting period.

The largest volumes were recorded on the Curve and Uniswap exchanges ($ 350 million and $ 446 million, respectively). Both platforms are automated market makers who can also act as decentralized exchanges. The recently hacked Balancer platform recorded a trading volume of $ 93 million, which is almost 2500% higher than in May.

What is the Reason for the Rapid Increase in Trading Volumes?

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This rapid growth can be partially explained by the fashion for automated market-making. As a result, these markets offer deeper liquidity on cryptocurrency assets, and sometimes much less significant slippage than on centralized sites.

In June, the market for automated market makers grew by more than 170%, while platforms focused exclusively on decentralized exchange trading showed an increase of only 10%. Meanwhile, too fast growth is fraught with problems, since decentralized exchanges still need time for development and stress testing in real conditions.

The latest increase in trading volumes is alarming since the “unnatural excitement and influx of deposits” on these platforms are partly associated with the phenomenon of liquidity mining.

Since January, total trading volumes on decentralized exchanges, including automated market makers, have more than quadrupled, from $ 276 million to $ 1.52 billion.

Danger on Decentralized Crypto Exchanges

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Hacking risks are growing along with popularity. Many popular decentralized exchange protocols are thoroughly audited and considered safe, yet the threat of a hacker attack remains. The closer the decentralized financial protocols are linked, the higher the risks of potential attacks.

The latest example is the decentralized liquidity provider Balancer, which lost $ 500,000 due to the attacker finding the vulnerability and managing to exploit it.

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