All eyes are on Bitcoin (BTC) as digital assets continue to climb to a new high by 2020. Meanwhile, the hype around decentralized financial projects continues to fade, especially as token prices fall. The data show that the trading volume of decentralized exchanges, or DEXs, is declining rapidly, indicating a decline in the DeFi sector.

The latest Harvest Finance hack has resulted in a massive one-day boom on DEX, especially on Uniswap and Curve. According to media reports and Harvest investors, the hacker implemented a quick loan return that spent millions of dollars in cryptocurrencies through Uniswap and Curve to lower the implicit prices of Tether (USDT) and USD Coin (USDC) on Harvest Finance.

The attacker then purchased these tokens at a discount, used them to make a quick initial loan repayment and made in the planned profit. After doing this several times, the folders in Uniswap have been expanded.

While the breakout pushed DEX’s daily volume to just over $ 5 billion per day, the anomaly was short-lived, and the volume has steadily declined since then.

The second half of October had the Dubai Stock Exchange’s worst week in terms of trading volume since August. Weekly trading volume fell from $ 8 billion in the first week of September to nearly $ 3 billion from 19-25. October. Uniswap continues to lead the group with a market share of 56% of total DEX trading volume.

Despite a significant adjustment of DeFi assets and a decrease in trading volume, the total closed value remained close to record levels. DeFi Pulse data shows that the total ordered value is currently $ 11.2 billion, just below the October 25 high of $ 12.46 billion.

Total locked value (USD) in DeFi. Source: DeFi Pulse
The DeFi season is over with the return of Bitcoin bulls
When the hype about decentralized economics comes out, Bitcoin is back in the spotlight. Bitcoin has risen almost 24% since the beginning of October, thanks to several high-profile prices from giants such as Square and Paypal, which could help triple Bitcoin’s user base in the near future.

The low DeFi volume shows that traders have lost interest in taking profits and returning to bitcoin. This was exacerbated by higher trading volumes in Bitcoin derivatives.

The volume of BTC futures contracts through the stock exchange. Source: data on digital assets.
Although it is difficult to see the effect of institutional players on Bitcoin price movements, acquisitions and the recent increase in options and futures volume suggest that bulls are playing a role.

After PayPal announced the addition of bitcoin to the platform, the price of bitcoin has risen by around 10%. On October 23, Grayscale announced that it had added $ 300 million in cryptocurrencies in just one day, and the company currently has $ 7.6 billion in assets under management.

Can DEX survive?
When investors turn their attention to Bitcoin, some wonder what the future will hold for decentralized assets. The total book value of DeFi is still high, but may soon change due to lower trading volumes on stock exchanges.

Since most of the benefits of DeFi protocols are related to trading volumes, lower volumes will result in lower revenues for liquidity providers and less investor interest in DeFi.

According to Ilya Abugov, senior analyst at DappRadar:

“There has been a slight decline since late summer, but I think it’s fine. The cyclic voltage exceeds the actual growth, and therefore a cooling period follows. From a basic point of view, however, nothing has affected the growth of DeFi and DEX. history. New projects are under development. ”
Despite some real challenges, a number of DeFi projects continue to generate strong investor interest. On 28 October, founder André Krone launched Keep3r, a decentralized work platform supported by KPR’s technical labor market.

Despite the lack of announcements, investors skipped the opportunity to participate in the project, and traders increased the CPR rate by 570% from $ 24 to $ 162.58. The trading volume for the project also amounted to more than $ 255 million on the first trading day.

The spray around Keep3r shows that there may still be interest if the right project comes. New projects and developments in DeFi may arouse interest in this area, said Abugoff:

In addition to wBTC, Ethereum DeFi will be featured in Zcash and Dash. DEXs facilitate the exchange of assets and should therefore benefit from the overall growth of DeFi. sector.

Source: CoinTelegraph