thecoinrepublic.com
- Decentralized exchange seems being dominated by crypto whales
- Average trade sizes at Curve Finance have been ranging from $500k to $1 million
- The count of daily transactions on CEXs platforms runs into the millions
- The forest dominance could be attributed to the high transaction costs at Ether
Decentralized exchanges (DEXs) have enabled the concept of Peer-to-Peer transactions without the requirement of any middle person. A recent research study from Kaiko, a French digital assets data provider remains mainly limited to large traders or cryptocurrency whales. The research report noted that the average trade size has been skyrocketing across all the digital assets exchanges platforms over the last few months. Simultaneously, the actual count of trades has remained unchanged. Notably, the stats shows that the average trader’s profile is now being more focused on digital currency whales.
Decentralized exchanges process fewer transactions
According to the report shared by Kaiko, average trade sizes at Curve Finance have been ranging from $500k to $1 million. Notably, as the trades on other popular decentralized exchanges including Uniswap V3, Uniswap V2, and SushiSwap have an average transactions count of about $10k to $20k trade size. It is also worth noting that the total figure is about ten times than the average $2k to $4k trade size that is seen on centralized exchange (CEX) platforms.
On other hand, the count of daily transactions on CEXs platforms runs into the millions. In contrast, large decentralized platforms process just a fewer than 50k transactions on a day-to-day basis. On an average, platforms like Curve Finance and Balancer V1 have minimal about 1k transactions in the same time period.
What prevents traders from DEXs?
Following the scenario, Kaiko noted that forest dominance could be attributed to the high transaction costs at Ether, the largest smart contracts chain. According to Kaiko, the large transactions are likely due to ETH’s soaring transaction fees. Indeed, the high gas fees are preventing more retail traders from using decentralized exchanges, as each of them will have to pay high gas fees for each transaction which due to congestion and scalability often exceeds $100.
DeFi growing demand has its impact
According to data from Chainalysis, the blockchain analysis firm, the main reason behind decentralized exchanges processing much larger transactions as compared to centralized platforms is the growing interest in the red hot DeFi industry. Following the scenario, several smart contracts platforms have been established since the beginning of this year. These platforms are offering cheaper and faster transactions on chains including Binance Smart Chain, Solana, Polkadot, and Avalanche.