A record quarter for decentralized exchanges, as seen by Messari

Key facts:

Only in May, the DEX moved more than 200,000 million dollars.

In contrast to exchanges, lending platforms fell.

The decentralized finance (DeFi) market seems to be here to stay. This is confirmed by its trade volumes, which do not stop growing: during the second quarter of this year 2021, this young industry once again broke its own records.

One of the areas with the most striking growth was decentralized exchanges (DEX), which during the second quarter they moved more than 400,000 million dollars, as a Messari report focused on the 2-2021 quarter review shows.

The figure, corresponding to the trade volume of exchanges such as Uniswap, PancakeSwap or SushiSwap, among others, represents an increase of over 80% compared to the previous quarter. In that period, the volume reached barely exceeded 220,000 million dollars.

Although the increase between consecutive quarters seems quite high, when comparing the period between April and June with the same period, but from the previous year, the jump is much more noticeable.

Between the second quarter of 2020 and this year there were an increase of 11,751% in the volumes moved by DEX, according to Messari’s records. In 2020, during those three months, trade on these platforms was only about 3.4 billion dollars.

Increased volume of trade on decentralized exchanges since the beginning of 2020. Source: Messari.

Although the total figure corresponds to the full quarter, the most determining moment was the peak of activity that the cryptocurrency market experienced in May, just before the price drop that led BTC to lose up to 50% of its value in two weeks .

May alone accounted for more than half of volume in the quarter, which, unsurprisingly, also marked the local top of the market.


More than 200,000 million dollars in a single month

Almost the same amount of money was traded in May alone as during the entire first quarter of this year, and then fell to less than half in June. Despite this drop, that month is currently the third with the highest volume in history, after last May and April.

Before this quarter that just ended, no month in history did DEX had moved more than 100,000 million dollars, with the maximum over 85,000 million set in February of this year.

May holds the record for the highest volume month in DEX history. Source: Messari.

Uniswap, protagonist among the DeFi

The DeFi exchange market has grown not only in volumes in recent months. Also new platforms have been added to the game. And although Uniswap was losing prominence compared to alternatives such as PancakeSwap, towards the end of the quarter again dominated around 54% of the total trading volume of DEXs.

The Messari researchers highlight that this percentage of dominance of Uniswap has not been seen since November of last year. To a large extent, the report indicates, this rebound was due to a mix between the fall of markets such as the Binance Smart Chain and the launch of Uniswap V3, reported by CriptoNoticias, last March.

Uniswap moves half the volume of all DEXs. Source: Messari.

Decentralized exchanges vs. centralized

The hard data of the amount of money circulating in the decentralized exchanges is striking, without a doubt. But another metric is perhaps more representative of the impact of DEX in recent times.

At the end of this second quarter, the value traded on decentralized exchanges exceeded the 10% equivalency of volumes on centralized exchanges. And although it had already happened before, the fact that the previous time, when it even approached 20%, is striking. It was in the midst of the DeFi boom, during the third quarter of last year.

Now, it has occurred amid a steep market crash and a decline in cryptocurrency trading or speculation following the May debacle.

The volume traded on the DEX is equivalent to more than 10% of what is traded on the centralized exchanges. Source: Messari.

Loan market in free fall

The point of contrast during the quarter was set by the loan platforms in DeFi: Aave, Compound and MakerDAO. In his report, Messari highlights that, despite the fact that the first half of the quarter there was a continuation of the momentum of the previous period, “The loan sector cooled down during the second quarter”.

The decrease in the amount of money deposited in decentralized lending platforms it also occurred with the market crash in mid-May. This broke an upward trend that this market had been experiencing: from 25,000 million in March to 45,000 million dollars before the market in full fell along with bitcoin.

Up to that point, “investors were looking to capture the exorbitant loan returns available across all lending protocols.” But with the market crash and its consequent “turbulence,” as Messari calls it, these investors “flocked to safer assets, causing a credit deposit collapse that completely wiped out growth.”

The money locked in Aave, Compound and MakerDAO fell along with the cryptocurrency market. Source: Messari.

Bright future for DeFi, predicts Messari

The DeFi ecosystem in general has had a similar behavior: affected mainly by the market winter since mid-May.

However, among the data of the report stands out a greatest diversity in the world of stablecoins, with those based on decentralized ecosystems – such as DAI – gaining ground with respect to those that are centralized, such as tether (USDT), Binance USD (BUSD) or USD Coin (USDC).

Another element that seems to hold a promising future for DeFi is the constant development of new platforms, solutions and innovative business models, alongside the growth of projects already established in the world of cryptocurrencies.

For researchers, this development, added to the growing interest of institutions and large investors, completes the image of a DeFi ecosystem with sustained growth in the following months and years.

In the coming quarters, DeFi is likely to have its moment of growth as scaling solutions arrive, institutions begin to dive into DeFi protocols, and ecosystems continue to mature, providing greater security for users.


Also, investor confidence is expected to return to the cryptocurrency market. And for analysts, that various platforms continue to grow despite the current panorama, it is a sample that the world of DeFi “It will continue to advance, with every step, towards a radically new open global financial system governed by code but built for people.”

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