Under China’s encryption ban and the continuous supervision of the United States, the trading volume of DeFi and DEX has soared

China last week Crack down on crypto transactions As the prices of Bitcoin and altcoins fell sharply after the announcement, cryptocurrencies sent shock waves across the market briefly, but as with everything related to cryptocurrencies, the market rebounded as flexible traders found other ways to participate in the market. .

Part of China’s goal of restricting citizens’ ability to trade cryptocurrencies appears to be focused on preventing the use of cryptocurrencies and the evolving Decentralized Finance (DeFi) ecosystem, but these strategies seem to have the opposite effect because the price of tokens in projects such as Uniswap and Agreement activity (UNI) and dYdX have been rising since the crackdown began.

according to data From Chainalysis, there are already a large number of regional Bitcoins (Bitcoin) The flow that occurs within East Asia is highlighted by the orange high bar in the figure below. This shows that cryptocurrency holders in the region have been changing their holdings in response to regulatory crackdowns.

Regional BTC traffic.Source: Chain Analysis

As Chainalysis puts it, “Assets usually flow within a region, which may be due to a preference for local exchanges, but the flow between regions is usually due to regulatory issues, geopolitical changes or major changes in market prices.”

The lack of funds flowing out of East Asia, coupled with the suspension of cryptocurrency exchanges such as Huobi and Binance to provide services to Chinese residents, indicates that funds are kept in the region rather than concentrated on exchanges.

related: In China FUD, the trading volume of derivative DEX dYdX surpassed Coinbase’s spot market

Benefits of the DeFi ecosystem

At the same time, this increased mobility in East Asia, Uniswap and Decentralized derivatives exchange dYdX As Chinese traders find safe havens for their crypto activities, this number has been rising.

Uniswap transaction volume and total revenue.Source: Token Terminal

DydX is a particularly useful data point because it is now the most widely used decentralized derivatives exchange, and after regulators around the world cracked down on centralized exchanges that provide derivatives services with loose KYC policies, Demand surges.

according to data From the perspective of token terminals, dYdX has been in the top 5 in many categories in the past week, including the increase in token prices, total agreement revenue, fees paid, market-to-sales ratio, and price-to-earnings ratio. The exchange also rose to the top 6 in terms of lock-in total value (TVL) growth.

Total revenue and total value locked on dYdX.Source: Token Terminal

A closer look at the available data also shows that the second layer of protocol and the first layer of Ethereum (Ethereum) Competitors have also made some of the biggest gains in the past week, including Avalanche-based agreements such as Trader Joe and Pangolin, and the Fantom network.

Most importantly, recent data shows that the decentralized financial ecosystem is functioning as originally intended to provide cryptocurrency holders with a trading method outside the control and authority of the government and financial regulators.

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