The leading decentralized exchange (DEX), dYdX, has recently experienced a significant increase in trading volume. According to popular crypto analyst Colin Wu, dYDx transaction volumes in the last 24 hours surpassed 4.28 billion, surpassing the leading crypto exchange Coinbase for the first time.
This comes on the heels of the latest Chinese crackdown last week, as well as a large influx of Chinese investors moving to decentralized exchanges. Colin Wu reported on the same topic last Saturday, September 25. According to the analyst:
Many Chinese users will flood into the DeFi world, and the number of users of MetaMask and dYdX will greatly increase. All Chinese communities are discussing how to learn defi.
The dYdX native cryptocurrency has increased by 34% today as a result of the recent rally. DYDX is currently trading for $20.55 and has a market cap of $1.14 billion as of press time.
Farming Drives Transaction Volume
However, according to Colin Wu, a large portion of the transaction volumes result from DYDX farming and are not driven by real demand. In addition, he mentions that the epoch1 developments on the platform have helped to support these volumes. However, as Wu points out, investors should exercise caution at this point.
The epoch1 of dYdX transaction mining will end tomorrow at 15:00 (UTC). Within one week after epoch0 on August 31, the 24-hour transaction volume of dYdX dropped by 90%.
However, daily exchange-traded volumes on dYdX have increased over the last six months. Trading volumes on dYdX have increased by nearly 20,000 percent since April 2021, indicating a massive demand for decentralized exchanges.
As a result of the recent China ban, cryptocurrency exchange Huobi was forced to suspend derivatives trading services for Chinese investors. These regulatory actions are likely to encourage more investors to use decentralized platforms. China’s crypto crackdown is nothing new; it has been ongoing since 2017. Despite this, investor interest in cryptocurrency continues to grow.