New Crypto Research Shows Trading Volume on Decentralized Exchanges Reaches New Lows
Decentralized exchanges (DEX) register new lows in their trading volumes in terms of US dollars and Ether transaction on-chain. According to a new report released by Diar, a crypto research company, unique addresses have also entered a new low.
These decentralized exchanges have been launched since June 2017. The intention is to provide a platform for transacting virtual currencies without having a centralized party, such as an exchange, that would control users’ private keys. In 2017, decentralized exchanges handled $8.9 billion while in 2018 their trading volume dropped to $7.1 billion.
Diarshows that DEX volumes have dropped to new lows in January 2019. This month, the trading volume registered by these platforms is just $49 million, less than a tenth of the trading volume registered by Binance, one of the most popular exchanges in the market.
Additionally, Diar shows that in terms of Ether (ETH), the current month is just a third of what was traded on Ethereum DEX only in January 2018. 23 million ETH was transacted in May 2018 while now, the ETH volume dropped down to 400k.
Diar wrote on the matter:
“Major exchanges have all shown interest in pursuing the DEX model. Binance has already shown a short demo of their platform. OKEx’s Open ledger DEX has launched, as has Bithumb’s DEX. And Coinbase last year purchased Paradex.”
There are some issues that decentralized exchanges must fix if they want to gain users and compete against centralized platforms. Until now, they have been offering low trading fees or no fees at all. However, they remain very slow and the user experience and infrastructure are very poor.
The cryptocurrency community is very excited about Binance and the DEX platform that it would be launching to the market in the near future. Binance could help solve some of the problems related to decentralized exchanges and offer a better experience for users. The Binance Coin (BNB) is going to be the digital asset of the upcoming Binance DEX.