It has been a fascinating year for decentralized exchanges. The more popular platforms all reside on Ethereum, yet the most significant Total Value Locked growth occurs on Binance Smart Chain. Competition is heating up significantly, which is something everyone can applaud.
A Big Push For Decentralized Exchanges
For people who have been involved in cryptocurrency, the concept of a decentralized trading platform goes back many years. Developers have tried to create ecosystems for trading, yet they may have been ahead of their time. Since 2020, the overall approach to crypto trading is changing. Many people now favor decentralized exchanges, especially for new altcoins, tokens, and assets.
What makes these platforms so appealing is how there are many more trading pairs. It is possible to exchange hundreds of assets without going through approval processes. It also opens up the floodgates to scams, rug pulls, and useless tokens, but that is the price to pay for decentralization today.
Over the past year, numerous decentralized exchanges have come and gone. Several top platforms still exist today, and they have all issued a native token at some point. Uniswap Sushiswap and 1Inch all explored this option and gained many users in return. Balancer, one of the older decentralized exchange platforms on Ethereum, is still attracting a lot of attention as well.
Over the past 30 days, these platforms all note significant increases in Total Value Locked. Interestingly, Uniswap has the smallest growth, albeit it still equals 37.1%. That is just over half of Balancer’s growth (71.41%) and less than half of Sushiswap (77.36%). The biggest increase comes from 1Inch, with a 151.8% increase in TVL. Imposing figures, but there is one project doing even better.
PancakeSwap Takes The Cake
Something appears to be brewing behind the scenes of PancakeSwap, one of the decentralized exchanges on Binance Smart Chain. Its total value locked has risen by nearly 800% in the past 30 days. Such growth is impressive and cannot go by unnoticed. There is some debate as to where this growth comes from exactly, though.
Similarly, PancakeSwap also notes the highest volume growth. Seeing this number go up by over 4,800% in a month is a bit problematic. With so many manipulation and wash trading claims, one has to wonder if there is some truth to those statements. The numbers seem a bit too good to be true.
Even so, it is good to see more competition among decentralized exchanges across different blockchains. Ethereum is far too expensive to use right now, and alternative solutions will gain momentum. Whether things stay that way is a different matter. Ethereum’s fees are unlikely to go back to normal, but not everyone will take a liking to PancakeSwap and consorts right away.