Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights, a newsletter crafted to bring you the biggest happenings of the past week.
The FTX collapse has created a sense of uncertainty among large investors and retailers alike, who are not quite sure whether they should keep their funds on centralized exchanges or not. The dilemma has caused a huge rise in DeFi protocols and decentralized exchanges.
DeFi protocols and decentralized exchange (DEX) platforms gained some momentum after the FTX implosion. A new report from Delphi Digital suggests that DEX platforms gained 24% in volume following the FTX crash.
In other DeFi news, cryptocurrency scammers are actively using black market identities to avoid detection. The 1Inch DeFi protocol seeks to optimize gas costs with its new router v5.
The DeFi market, like the rest of the cryptocurrency market, continues to recover from the turmoil following the FTX crash. All but a few of the top 100 DeFi tokens were trading in the red for the second week.
DeFi Platforms Earn Profits Amid FTX Collapse and CEX Exodus
A week after the fallout from the FTX and Alameda mayhem, it’s interesting to look at some data from the chain. Although record amounts of Bitcoin (BTC) and Ether (ETH) are leaving exchanges, not all DApps and protocols have shown growth, mainly due to reliance on FTX and Alameda.
Combined with the migration away from centralized exchanges (CEXs), the volatile cryptocurrency market has users trading in record numbers. According to Token Terminal data, the daily trading volume of perpetual exchanges reached $5 billion, which is the highest daily trading volume since the collapse of Terra (LUNA) and TerraUSD (UST) in May 2022.
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FTX Collapse Was Followed By A Rally In Stablecoin Inflows And DEX Activity
Delphi Digital used baskets of assets to analyze the performance between DEX and CEX tokens and found that when comparing basket prices to BTC, the DEX basket gained 24% while the CEX basket is down 2%.
On-chain activity typically correlates with overall Bitcoin, Ether, and altcoin market sentiment, with the current FTX chaos catalyzing historic exchange exits and CEX token underperformance. One trend likely to emerge from the current chaos is a steady rise in self-custodial cryptocurrencies and increased use of DEXs.
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Crypto scammers are using black market identities to avoid detection CertiK
Cryptocurrency scammers have been tapping into a “cheap and easy” black market of individuals willing to put their name and face on fraudulent projects, all for the low price of $8, blockchain security firm CertiK has discovered.
These individuals, described by CertiK as “professional KYC actors”, would in some cases willingly become the verified face of a crypto project, gaining the trust of the cryptocurrency community before an “internal hack or exit scam.”
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1inch seeks to optimize gas costs with its new v5 router
According to 1inch, user gas costs for exchanges will be at least 10% lower than their previous offerings in the DEX segment, thus making trading activity on the Ethereum network more profitable for its users.
In Router v5, 1inch estimated that swaps will be about 5% more gas efficient than the previous version and 10% more gas efficient, compared to the second best performing player in the DEX segment. .
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DeFi Market Review
Analytical data reveals total value of DeFi locked plummeted to $40 billion Data from Cointelegraph Markets Pro and TradingView shows the top 100 DeFi tokens by market cap plunged lower due to the FTX saga, with most tokens posting double-digit losses over the past week.
Thanks for reading our roundup of this week’s biggest DeFi events. Join us next Friday for more stories, perspectives, and education in this dynamically-advancing space.
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