Signs of recovery during the later stages of Q1 dampened as trading volumes failed to continue the upward trend in Q2. While centralized crypto exchanges were the biggest losers due to the mounting pressure from regulators, the resultant choppy market conditions didn’t spare the decentralized counterparts either.
The latest data compiled by CoinGecko revealed that the spot trading volume on decentralized exchanges plummeted by over 28%. Uniswap, however, maintained its dominance in the space.
Decentralized Exchange (DEX): Q2 Recap
Prominent crypto data aggregator CoinGecko rolled out its industry report, which noted that spot trading volume across the top 10 decentralized exchanges (DEX) totaled $155 billion in 2023 Q2. This represented over a 30% drop from Q1.
Despite the memecoin resurgence led by the PEPE explosion in Q2, volumes on DEXs failed to witness a noticeable uptick. The decline was considerably less compared to the volume of CEXs which was down by more than 43% QoQ.
Uniswap, on the other hand, solidified its position as the largest DEX. Its trading volume picked up pace in the first quarter itself due to the regulatory clampdown in the US and a banking crisis that caused the USDC stablecoin to de-peg. This, in turn, triggered an influx of investors in decentralized exchanges which continued to boost investors’ rush to the platform even in Q2. Data suggested that the dominance surged as high as 70% in May.
Besides, CoinGecko revealed that the release of crvUSD stablecoin did not have a positive impact on Curve, which experienced a downfall in its volume. The report said that the stableswap concluded June with 11% of the market share.
TraderJoe also witnessed a similar fate. The volume of the Binance Smart Chain-based decentralized exchange also noted a drop in its volume. Despite breaking into the top 10 in the previous quarter, TraderJoe ended Q2 with a mere 0.3% of the market share.
Breakdown by Chain
CoinGecko observed that despite a waning dominance, Ethereum was the most popular chain for DEX trading, with a 57% market share. It captured $87.8 billion of DEX trading volume in the second quarter, representing 57% of all chains. The Ethereum blockchain was down by more than 44% QoQ when it recorded $158 billion in trading volume with a 74% market share.
Contrastingly, Arbitrum has performed significantly well, pulling itself to the second position accounting for 17% of the market share by June-end. Trailing behind is Binance Smart Chain (BSC), capturing a market share of 10% during the same period, followed by Polygon with the fourth highest trading volume and 6% market share.
As of June, these top four chains contribute over 95% of volume.
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