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The monthly trading volume of decentralized exchanges (DEX) recorded a drop of 38.8% in the month of October. The drop resulted in the trading volume sliding from $26.3 billion to $16.1 billion. With the wild growth in popularity of decentralized finance (DeFi) this year, the DEX trading volume has been on a consistent increase up to September when it reached a peak of $23.6 billion.
The peak could have been driven by the peak of yield farming interest, which was attained in August as investors flocked to the DeFi market. According to data from cryptomarket analytics platform CryptoRank, the most rapid growth in this volume started in July when it jumped from $1.68 billion in June straight to $4.49 billion in July, followed by an increase of $10 billion in August to $14.5 billion.
Drop coincides with crash in DeFi market
The month of October was anything but friendly to the DeFi market. After a solid performance for most of 2020, DeFi suddenly experienced a crash in October, which affected most of the top DeFi tokens. Data released by CryptoRank showed that all top DeFi tokens recorded negative returns for the month, except LINK (Chainlink) and REN.
The market crash started in September when top DeFi tokens Chainlink, yearn.finance (YFI) and Uniswap (UNI) first saw major corrections. While LINK managed to recover and close October as the best performing DeFi token, YFI and UNI could not recover as it lost up to 56% and 40% of their value respectively in the same month. LINK gained 13.7% while REN, which is becoming popular because of the growing demand for tokenized Bitcoin, recorded a gain of 12.2%.
On the way to recovery
Following the brutal month of October, the DeFi market is on its way to recovery with some of the top tokens recording gains, data from CoinMarketCap shows. At time of writing, YFI is up over 24% in the last seven days. UNI, Maker (MKR), and Synthetix Network Token (SNX) are also in the green, up 14%, 3,8%, and 15%, respectively, over the same stretch. As the month of November begins with some of the top tokens posting gains, will it be better than October or is the DeFi market going to be down for a while?
Ponvang Bulus is a cryptocurrency enthusiast, and he writes on cryptocurrency and blockchain technology. As a believer in the glorious future of blockchain, he is helping to spread the word and get the message out there for the world to embrace the future now.
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