Decentralized exchanges (DEXs) keep expanding their presence, attracting more users to top platforms. Over the past month, the activity of DEXs continued to grow, with an increase in users on leading platforms.
Growth of DEXs Activity
DEXs activity continued to expand, boosted by a shift to the hottest spots for meme token activity. The balance of influence is also shifting, as Raydium outpaced Uniswap with percentage growth in the past four weeks. Raydium continues to list about 1% of new meme tokens that start out on Pump.Fun. Raydium has been the leading DEX in the past five months, constantly improving its market share with new listings and the trading of already existing meme tokens. The closing volumes in August will also give more clarity for the performance of DEXs in H2. In July, DEXs trading expanded to levels not seen since the market peak in March. The Ethereum DEXs ecosystem moved with the rest of the market, with Uniswap reflecting peak market days.
Impact on Blockchains
The Solana ecosystem grew its liquidity in the past months, reflecting the bigger share of meme trading. Tools available for DEX users also shifted, with dedicated routers and block builders taking a large share of the traffic. The usage of DEXs also affects the working of Ethereum, with more blobs added to each block. The addition of blobs means users have shifted to cheaper, high-volume networks, which send transaction blobs to the main chain. Smaller multichain exchanges are also growing even faster due to the low baseline activity. The chief competition is still between Ethereum-based markets and the emerging Solana trades. In the past week, however, Pancake Swap also reawakened, driven by increased bot activity on Binance Smart Chain (BSC). In the past two weeks, BSC exchanges got a boost from the acceleration of the bot trading wars. For now, the leader of DEXs sniping is still BonkBot, with Solana having the biggest share of fast, bot-driven swaps.
Key Revenue Generators
Increased volumes led to more than 300 million swaps on Uniswap in the year to date while expanding the list of newly launched tokens. JupiterDEX is the third most active service for routing and finding the best swap prices. DEXs are still extremely competitive when it comes to including fast transactions, and not all swaps are priced the same. High-speed trading and guaranteed transaction inclusion are still expensive, even for Solana users. Raydium still holds more than $1 billion in reported liquidity, while Uniswap is the leader with $4.75 billion. The biggest difference in decentralized services, however, is between DeFi protocols and token-trading hubs. The latter produces much higher fees, with $7 million for Uniswap on a weekly basis and up to $3.59 billion in fees from Raydium. At the same time, protocols like Curve and Balancer show a much lower turnover of fees under $500K weekly. The Aerodrome DEX is also trying to graduate among top trading hubs, already achieving $1.41 million weekly fees. Overall, DEXs thrive when tied to a top L1 blockchain or one of the leading L2s like Arbitrum or Base. In terms of trading volumes, DEXs are also relatively agile, easily doubling their activity when trading interest returns. According to TokenTerminal, top DEXs increased their volumes in a range between 40% and 178%, with Uniswap expanding weekly activity by 88%.
The growth of activity on decentralized exchanges continues, despite not reaching the peak levels of 2021. Trading volumes and the number of tokens are increasing, highlighting the significance of DEX in the current landscape. The valuation of DEX tokens is still low compared to the volumes and fees generated.
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