en
Back to the list

DEX Volume Breaks All-Time High Amid "Yield Farming" Craze | Crypto Briefing

source-logo  cryptobriefing.com 24 June 2020 03:56, UTC
Ampleforth's logo
The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner

DEXes facilitated $503 million of volume last week, with Uniswap and Curve Finance leading the charge. The demand for DEX liquidity is a direct result of yield farmers rapidly optimizing their strategies to improve profitability.

Dex Liquidty Breaks More Records

The last time DEXes broke their all-time high volume was March 2020, amidst the Black Thursday market crash. This time, DEX volume is surging on a different kind of exuberance.

Over $500 million of trading volume was run through DEXes in the last week. Uniswap did $135 million of volume this week. Yet, the usual DEX leader was trounced by Curve, which did a whopping $211 million of volume.

In June 2019, DEXes facilitated $325 million of trade. In June 2020, this number shot up to $1.08 billion – and the month isn’t even over yet.

Yield farming has attracted a new class of speculators to DeFi. The returns vary from a few percentage points of yield per year to over 100% annualized returns.

An inflow of fresh capital has caused an unexpected mania within DeFi. The craze has lifted the price of borrowing BAT on Aave to 109% a year.

DEXes have enjoyed higher volumes as traders need to continually switch the assets they supply or borrow from money markets to optimize their returns.

To efficiently farm yield, speculators need to change their strategy daily – sometimes even a few times a day. These strategies entail using one asset as collateral, borrowing a second asset, and sometimes even swapping it for a third asset.

This creates volumes for DEXes. And since most yield accrues to stablecoins, Curve Finance, a stablecoin-centric DEX, benefitted in a big way.

While these high yields aren’t sustainable over long periods, DeFi enthusiasts are hoping that this mania expands DeFi’s user base and improves liquidity in the ecosystem.

Ampleforth's logo
The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner
Learn More
Ampleforth Adaptive Gold Stablecoin

Recommended News

The DEX Top 10: Crypto Briefing’s Decentralized Exchange Picks

Curve Finance Finds "Product-Market Fit" Yield Farming in DeFi

cryptobriefing.com