Heres Why Ethereums DEX Volume Crashed in October

Monday 26 October 2020, 3:41 AM AEST - 1 month ago

shutterstock_130579364-gID_4.pngDown she goes! Image: Shutterstock

  • In early October Sam Bankman-Fried, the CEO of FTX, which operates the decentralized crypto exchange Serum, predicted that a surge in trading volume on Ethereum-based DEXes wouldnt last.
  • Volume fell sharply across DEXes in October.
  • On Decrypts podcast, he explained how he identified what he calls fake volume.

At the LA Blockchain Summit in early October, Sam Bankman-Fried, the CEO of crypto exchange FTX, said that a summer surge in volume on Ethereum-based DEXes was bullshit—a bullish few months, he said, was no guarantee of a bullish future.

It turns out Bankman-Fried, whose company, FTX, also operates a DEX called Serum, was correct. According to the crypto data company Dune Analytics, trading volume on Ethereum-based DEXes fell sharply throughout the month of October. Volume is down 45% in the past 30 days.

Decentralized exchanges are unlike Coinbase and Binance, so-called centralized exchanges. While centralized exchanges hold custody over your cryptocurrencies, decentralized exchanges do not. The most popular is Uniswap.

Weekly trading volume on these exchanges exploded over the summer, peaking at over $8 billion in late August, thanks in large part to decentralized finance protocols offering new incentives with the potential for huge returns.

On Decrypts podcast this week, Bankman-Fried went into detail about how he arrived at his conclusion.

What was happening on DEXes, he said, was roughly analogous to trans-mining, or

Read full story on Decrypt

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