Derivatives DEX dYdX beats out Coinbase by volume amid China FUD
Decentralized derivatives exchange dYdX has seen a surge in trade activity as concerns surrounding a renewed Chinese crypto crackdown have circulated this year, with the decentralized exchange (DEX) now processing more volume than Coinbase’s spot markets for the first time.
According to CoinGecko, dYdX has facilitated more than $4.3 billion worth of trades in the past 24-hours, beating out Coinbase’s $3.7 billion in volume by nearly 15%. DYdX founder and former Coinbase employee Antonio Juliano celebrated the milestone in a Monday tweet.
The surging growth for dYdX comes amid renewed concerns regarding the threat heavy-handed Chinese regulation could pose for the global crypto sector.
On Friday, Beijing intensified its crackdown on crypto assets by banning all digital currency transactions. The People’s Bank of China said in a statement that cryptocurrencies are “not legal and should not and cannot be used as currency in the market.” As reported by Cointelegraph, China has “banned” or caused FUD in the crypto space on 19 separate occasions since 2009.
In a tweet on Sunday, China-based crypto reporter Colin Wu noted a recent surge in demand for DEXs and other decentralized finance (DeFi) products among Chinese users, stating:
“A large number of Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.”
In late June, one of China’s largest crypto exchanges, Huobi, banned domestic derivatives trading. The following month, Huobi closed its China-based exchange operator as pressure from Beijing escalated before halting all new registrations for Chinese users on Friday.
Over the past six months, dYdX has grown by 19,700% in terms of daily exchange trade volumes, which were just $22 million at the end of April according to CoinGecko.
Coinbase, comparatively, has remained relatively flat in terms of exchange volume growth over the same period with around 6%. Coinbase volumes did surge to an all-time high of $19 billion in late May when crypto markets were also at their peak.
Wu also noted that other derivatives exchanges were seeing an uptick in Chinese registrations, stating “FTX registrations may also be on the rise. The Chinese community is sharing its registration link.”
DYdX offers a range of perpetual contracts on various crypto assets allowing traders to hold leveraged positions without using contracts with a fixed expiration date.
Related: dYdX exchange releases governance token, making its airdrop worth up to $100K
L2beat, which tracks data for layer-two protocols, is reporting that dYdX is currently second in terms of total market share with around 19% and $478 million in total value locked, an increase of 20% over the past seven days.
In September 2019, Coinbase invested 1 million USD Coin (USDC) stablecoins into dYdX in what it called a USDC Bootstrap Fund. In June this year, dYdX raised $65 million in a Series C funding round led by venture fund Paradigm.
Source: Read Full Article