Decentralized finance has seen parabolic growth since the start of 2020, with the total value locked in these contracts, largely based on Ethereum, rising from $1 billion to $12 billion now.
Crucial to this growth has been decentralized exchanges.
With the introduction of Uniswap and other decentralized exchanges, things began to change.
At many points this past summer, the volume and liquidity on decentralized exchanges surpassed that of top exchanges such as Coinbase.
Top analysts in the space think that Ethereum dexs will surge even higher in the weeks and years ahead. This should result in a rally in all of DeFi and likely ETH itself, which will benefit from this influx of interest in transacting in a decentralized manner.
Crypto-asset analyst Qiao Wang thinks that two fundamental trends are going to send decentralized exchanges into overdrive in the months and year ahead. First and foremost, Ethereum layer-two scaling solutions and layer-one solutions are starting to come online after months and years of development.
Optimism is expected to roll out Optimistic Ethereum, which will enable DeFi transactions to take place on a more private, cheaper, and capable second layer.
The second reason why dexs could take off is that there have recently been a number of issues with centralized exchanges.
"Hard to overstate the importance of 1) Ethereum L2s and scalable L1s coming online, and 2) What happened to Kucoin/Bitmex/Okex over the last 2 weeks. Timing cannot be better for decentralized futures/swap exchanges to finally take off in 2021.".
Timing cannot be better for decentralized futures/swap exchanges to finally take off in 2021.
Here's why DeFi and decentralized exchanges could grow even more
Published on Oct 18, 2020
by Cryptoslate | Published on Coinage
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