While the traditional retail traders have been frustrated with Robinhood in the GameStop debacle, decentralized exchanges had just set a new record for the monthly trading volume.
The mania around GameStop, AMC, and other “meme stocks” have made stockbrokers like Robinhood restrict or halt trading for several users.
Nevertheless, decentralized exchanges like Uniswap see a mania of their own, with no way for the developers and anyone else to interfere.
According to data from Dune Analytics, the Decentralized Exchanges (DEX) just closed their biggest month ever, processing over $63 billion in trading volume in the last 30 days. It is more than half the total volume from all of 2020 in just January alone.
It is a sign of the cryptocurrency industry’s continued rapid growth, significantly decentralized finance (DeFi), as the cracks begin to show in the traditional stock trading structure.
The Decentralized exchanges are now built to run on blockchains like Ethereum, using smart contracts to swap between cryptocurrencies automatically. The decentralized nature of the exchanges means that no centralized authority connects trade order to another, alternately using pools of liquidity contributed by the protocol users to swap directly among digital assets.
Having no centralized authority also means DEX trades can never be censored or suspended, unlike the brokers like Robinhood that can change the rules about who can trade and how much professedly at will.
The decentralized exchanges are a part of a larger industry known as DeFi, or decentralized finance. DeFi wants to replace the traditional financial industry’s products and services, like loans, asset swaps, and interest-bearing deposits on decentralized blockchain networks, permitting equal access for anyone with an internet connection.
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