The crypto market often discusses overall volumes and total value locked (TVL) in DeFi, but these figures do not always reflect the real picture. A new metric based on decentralized exchange (DEX) activity may more accurately predict potential market winners.
New DeFi Metric
Instead of merely counting the number of DEXs on a network, it is advisable to consider the ratio of active DEXs to the trading volume they generate. A high number of DEXs does not necessarily equate to network strength; the efficiency of a few major platforms is far more crucial.
SUI's Achievements
SUI stands out among crypto projects, boasting only a few DEXs yet demonstrating impressive trading volume of over $15 billion monthly and a TVL of $2.25 billion. This indicates a high concentration of use where traders prefer to engage primarily with leading platforms.
DEX Concentration and Its Significance
The total trading volume on DEXs across the crypto market reached $114 billion last week, but this volume was not evenly distributed. It's crucial to focus on chains and DEXs where most of the volume is concentrated, as this can signal strong activity and interest from traders.
The new metric focused on DEX activity allows for a better understanding of the real market picture and the identification of the most promising tokens. Monitoring volume concentration, rather than solely relying on overall metrics such as TVL and raw volumes, is essential.
