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Centralized exchanges are heating up ...

Centralized exchanges fuel the hype around DeFi tokens up
CONTENT

  • Centralized exchanges have a significant impact on the rise in the price of DeFi tokens

  • The rise in the price of BTC and ETH caused a fall in the cost of new DeFi tokens

  • Analysts Confident DeFi Growth in 2021

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Recent studies by OKEX and Kaiko show that Centralized Trading Platforms (CEX) drove the price of DeFi tokens to riseDecentralized Finance (DeFi) is financial services built on blockchain technology that offer users access to an open, efficient and … More.

Centralized exchanges are heating up ...

CEX Exchanges Drive DeFi Token Growth

Recent research by Kaiko and cryptocurrency exchange OKEX show that centralized exchanges have played a role in sparking the rise in popularity of DeFi tokens. At the beginning of this summer, dozens of DeFi projects poured into the market, which opened up a new source of income for the world – profitable farming. Centralized exchanges quickly got their bearings and began to massively add new tokens to their listings, thereby pumping up the price of DeFi tokens.

“Centralized exchanges like OKEx have also played an important role in popularizing DeFi projects by hosting new tokens. According to OKEx’s August report, DeFi tokens accounted for only 19% of OKEx’s total spot trading volume. In September, this number jumped to 25%, ”the study says..

Centralized exchanges quickly adapted to the changing market and launched their own decentralized finance platforms, combining CEX and DEX into a single system. In addition, by the end of the summer, centralized exchanges implemented new functions for DeFi tokens, which were traditionally used in cryptocurrency trading..

Centralized exchanges are heating up ...

These include margin trading and DeFi derivatives trading. By the end of September, OKEx had posted 50 DeFi tokens on the platform, offering margin swaps for eight DeFi coins and USDT margin swaps for 27 of them.

The listing of the UNI perpetual swap on OKEx in September contributed to a significant increase in trading volume on the exchange. Other centralized cryptocurrency exchanges also began to list swaps for the most popular coins, such as UNI, YFI, COMP and others, increasing trading volumes on the sites. This trend was observed until September-October 2020..

DeFi Token Trade Volumes

Bitcoin and ETH vs. DeFi

Kaiko researchers argue that it was the rise in the value of Bitcoin and ETH that led to a decrease in the trading volume of new DeFi tokens and a drop in their price. But the most popular DeFi tokens, on the contrary, received a “second wind”.

“The drop in prices for new DeFi tokens began on November 5 when the price of BTC rose from $ 14,000 to nearly $ 16,000. UNI rose 14% after falling to $ 1.80. Since then, the prices of DeFi tokens have followed the dynamics of Bitcoin, ”the study says..

The peak trading volume for DeFi tokens was recorded on November 7. This event coincided with Joe Biden’s victory in the US presidential election and sparked a boom in centralized platforms. Decentralized platforms like Uniswap are out of work. On the same day, YFI rallied from $ 11,800 to $ 17,500 and then closed at around $ 14,000. At the same time, BTC fell nearly 5%, showing an intraday swing of 9%.

Analysts note that the newly created DeFi tokens used in profitable farming have gone through the boom and bust cycle of new asset classes. Market participants have revised their attitude towards these assets. As a result, the top DeFi tokens bottomed out in November and then resumed growth. DeFi’s Total Market Capitalization Soars To $ 19.2 Billion On Nov 24, Approaching September Peaks.

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Centralized exchanges are heating up ...

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