2023 started great with huge price increases in the crypto market. The trading volume on both centralized and decentralized platforms finally rose again. In the second quarter, unfortunately, it was not possible to continue this momentum and the volume fell sharply. This is according to an investigation from Coingecko.
Crypto volume plummeted
As mentioned, this year started very well. However, legislative chaos and very aggressive financial regulators threw a spanner in the works, and momentum stalled a bit. The trading volume in particular took a significant hit in the second quarter of 2023.
Trading volume on centralized crypto exchanges (CEX), of which Binance is the leader, reached $1.42 trillion in the second quarter. That is a decrease of 43 percent compared to the first quarter of 2023. Although decentralized finance (DeFi) performed slightly better, this branch of the crypto industry was not spared either. Trading volume in the DeFi sector reached $155 billion, down about 28 percent.
Although CEXs had a harder time in percentage terms than decentralized exchanges (DEX), centralized exchanges are still a lot more popular. About 89 percent of all trading volume takes place on CEX, the remaining 11 percent on DEX. This means that this ratio (CEX:DEX) falls below 90 percent for the first time in a year.
Uniswap on Ethereum is doing good business
Within the advance of DeFi, there is a clear winner. This is the platform Uniswap (UNI), a DEX on Ethereum (ETH). The attack by the financial regulators in America on centralized exchanges caused many traders to ‘flee’ to DeFi. Uniswap, the flagship of DeFi, has been a particularly popular retreat. Uniswap saw its market share rise to 70 percent in the second quarter.
In terms of blockchains used in the DeFi world, Ethereum is still the undisputed number 1 with a market share of 63 percent. Aribtrum, a new layer-2 network for Ethereum, performed strongly last quarter and took accounts for 17 percent of DeFi activity.