Fremen Bi-Weekly #12 - All about DEXs

Starting this week, the Bi Weekly Fremen changes its focus and will be an update on all happenings in the DEX trading world!

This 1st issue of the series will outline the current state of DEXs in general, together with some supplementary explanations and commentaries.

Highlights during 24th/Jul - 6th/Aug, 2023

  • Most of the on-chain volume still is on Ethereum. Its most traded pair during the past two weeks was USDC/USDT (~16% of all volume on Ethereum), mostly facilitated by Curve.

  • On major L2s such as Arbitrum and Optimism, most of the volume goes to USDC/WETH.

  • Majority of the on-chain volume is through Uniswap, with Uniswap V3 being the No. 1 and Uniswap V2 being the No.4, together taking over 50% of the entire volume.

  • Maverick, a newer DEX on Ethereum, is rapidly increasing its volume share among the competitors.

  • USDC is the most traded asset on-chain

DEX volume breakdown

Despite being the only one among the top DEX’s that does not continuously incentivize liquidity, Uniswap, especially Uni V3, is taking the majority of the on-chain volume. The volume on Uniswap V3 is also more distributed among networks, with about 35% of its volume coming from other networks than Ethereum. In comparison, it is less than 5% for the second most distributed DEX.

Curve saw a temporary surge in volume coupled with a sharp drop in TVL, and this is attributed to the recent Vyper exploit the protocol experienced. Meanwhile, the controversy that surfaced over the past several days around Tether also caused some panic in the stablecoin market, which then contributed to the high volume in USDT trades on Curve.

Maverick is the newest major DEX that started absorbing more market share lately, and has already taken the 5th place in terms of on-chain volume. The protocol provides its native support to LPs in an attempt to simplify the LPing process and improve the overall UX for LPs.

Top networks and most traded pairs

We can see that even though the hype around L2s is high, BNB still takes the 2nd highest volume. Interestingly, L2s do have a common ground in terms of the most traded pair with ETH/USDC, conversely to Polygon the highest trading pair on these chains is not their own network token.

Swaps on DEXs across networks

The largest average swap size (~$4k) was on Ethereum. Meanwhile, the average swap size on the other networks (BNB, OP, Polygon) was below $500, except for Arbitrum’s average at $1.4k.

When comparing the average swap size on Uni V3 vs. network overall, mostly, the Uni V3 average is similar to the networks average, on Ethereum however the average for UniV3 was 8k (2x higher than the average across all DEXs on Ethereum).

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