finbold.com
The total value locked (TVL) in DeFi has surpassed countries’ GDPs with more than $52 billion invested.
Infrastructure layer-1 blockchains are the body of this system, sustaining this value. Meanwhile, decentralized exchanges (DEX) are the hearts that keep the body alive, connecting every asset and protocol.
Essentially, a DEX allows cryptocurrency investors to trade tokens of its ecosystem in a decentralized manner. There are single-chain and multi-chain decentralized exchanges built under each infrastructure’s rules.
In particular, three decentralized exchange protocols shine amid their competitors: Uniswap ($UNI), PancakeSwap ($CAKE), and Orca ($ORCA). Finbold retrieved data from DefiLlama on December 21 that justify these picks for 2024.
Leading decentralized exchange: Uniswap ($UNI)
Uniswap is the leading decentralized exchange and one of the most solid protocols in this category. It was initially built on Ethereum (ETH) but now already supports 12 chains with a $4.06 billion TVL.
Interestingly, its total value locked surged by 69% in the last 24 hours, for a similar increase in the week. With a current $5.98 per token price, $UNI’s market cap is almost the same as its TVL, indicating a balanced valuation.
PancakeSwap ($CAKE)
PancakeSwap has the third-largest TVL of $1.50 billion and is the heart of $BNB Chain ($BNB). The DEX achieved huge success in 2021 during the play-to-earn game Mania as a core launchpad for these projects.
Currently, Pancake has kept its high ranks by expanding support to 8 other chains. Its token, $CAKE, is trading at $2.48 and has less than half its total value locked in capitalization. Therefore, the 0.45 MCap/TVL ratio suggests an asymmetry and an interesting buying opportunity.
Orca ($ORCA), a promising decentralized exchange
In the meantime, Orca earned its position in this list due to the huge success of Solana’s (SOL) DeFi ecosystem. This decentralized exchange is a Solana-only DEX and has seen an increase of 169% in its TVL. $ORCA sits in the 10th position by total value locked, with $179.13 million worth of Solana-based tokens invested in its liquidity pools.
Nevertheless, the token shows signals of being currently overbought, with a market cap two times higher than its TVL. $ORCA is trading at $8.47 by press time, up 1,870% year-to-date (YTD). Still, it is a decentralized exchange token worth watching for 2024.
All things considered, decentralized exchanges depend highly on the infrastructures they support. As long as there is a crescent trading volume and demand for DeFi, these protocols are expected to grow together.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.