From the data, the current state of DEX: trading volume has increased by 100% year-on-year, with weekly trading volume reaching 17 billion dollars. Is everything getting better again?
2024-09-30 17:55:09
Collection
Despite the decline in trading volume of DEX since its peak in 2024, it still hovers around $20 billion to $25 billion per week, representing a 100% increase compared to last year.Author: OurNetwork
Compiled by: ShenChao TechFlow
DEXs
Uniswap | PancakeSwap | Raydium | Let's F***ing Joe (Trader Joe)
DEX trading volume increased by 100% year-on-year; weekly trading volume reached $17 billion
- Although the trading volume of decentralized exchanges (DEX) has decreased since its peak in 2024, it still hovers around $20 billion to $25 billion per week, a 100% increase compared to last year. Solana and Base have made significant contributions to the trading volume, with Solana's volume increasing more than 20 times, from $170 million to $4 billion. The only blockchain that saw a decrease is Ethereum, with weekly trading volume dropping by about 20%.
- DEX trading has become more competitive than a year ago, when Ethereum accounted for nearly 60% of market trading volume. Currently, five blockchains have a market share of over 10%. Ethereum remains the largest blockchain, accounting for 29%. Base has gained significant market share during 2024, now accounting for over 12% of DEX trading volume across all chains.
- There have also been significant changes in trading venues. Uniswap's market share has dropped to 33%, down from 53%. Meanwhile, established DEXs like Orca, based on Solana, have increased their market share, and the popularity of the new exchange Aerodrome has also risen.
Uniswap
Uniswap generated $26.4 billion in fees over the past year
- One of the most attractive features of Uniswap is that it allows liquidity providers—users who provide assets for traders—to earn income. The chart below shows the fees generated by V3 pools over the past 12 months. The USDC-WETH pair performed the best, generating over $4 billion in income for liquidity providers (LPs). Uniswap V3 offers multiple fee tiers to charge traders—0.01%, 0.05%, 0.3%, and 1%—providing flexibility for LPs and traders alike, with similar assets, such as stablecoins, typically incurring lower fees. These tiered fees allow LPs to optimize returns based on asset volatility and trading activity.
- In Uniswap V2 liquidity pools, the WETH-USDT pool performed the best in terms of fees collected, exceeding $1 billion, followed closely by the USDC-WETH and PEPE-WETH trading pairs. Despite V2's simplicity, V3's concentrated liquidity feature has attracted larger trading volumes due to its higher capital efficiency and lower fees.
- Although Uniswap has generated substantial income for liquidity providers (LPs), $UNI is merely a governance token and lacks mechanisms like token burns that could enhance its value. 60% of UNI was allocated to the community in 2021. This $UNI HOLD Wave chart showcases some interesting trends.
- Trading Highlight: This transaction shows the transfer of 500,000 $UNI (approximately $3.5 million) from Uniswap's time-locked contract, which is part of its allocation mechanism. This system ensures that tokens are distributed gradually, aligning with long-term interests and providing transparency. Analyzing these transfers can provide insights into allocation progress, potential market impacts, internal behaviors, possible changes in governance power, and the health of the protocol.
Pancakeswap
PancakeSwap's $CAKE supply decreased by 7.8 million after a year
- PancakeSwap is a decentralized trading platform originating from BSC, now operating on multiple blockchains—this DEX issues the $CAKE token as rewards for liquidity providers (LPs). In 2023, PancakeSwap adopted a deflationary model to optimize its token economics. This was achieved by reducing the issuance and implementing mechanisms to buy back $CAKE from the market. Their efforts quickly paid off, as the CAKE supply peaked at 391.3 million in August 2023. Since then, the supply has steadily decreased, with a reduction of 7.8 million tokens over the past year.
- To achieve this deflationary goal, PancakeSwap burns tokens weekly by sending CAKE to a burn wallet on the BNB chain. According to their token economic model, an average of 9 million CAKE is burned each week. The reduction in issuance and market buybacks offsets the minting volume.
- The deflation is influenced by market factors such as trading volume and CAKE price. Over time, the deflation rate has varied between 1.4 CAKE and 0.2 CAKE per block. According to the current token economics, a weekly supply reduction requires a market buyback of 275K CAKE. This target is nearly achieved every week.
- Trading Highlight: The team wallet conducts token burns every Monday. Monitoring these transactions provides all the information needed to track CAKE supply.
Raydium
Raydium's total buybacks exceeded $35 million since January 1
- Raydium is the leading decentralized exchange (DEX) on Solana by market share and liquidity pool creation. Since January 1, 2024, over $35 million in protocol fees have been allocated for the automatic buyback of $RAY tokens. Throughout the year, Raydium has averaged between 30% to 50% of the cumulative spot market trading volume on Solana. Since its inception, Raydium has achieved nearly $270 billion in trading volume, with liquidity providers (LPs) earning over $630 million in trading fees.
- Excluding trading bots and considering real trading volume, Raydium's swap routing program performs excellently, currently accounting for over 30% of all real trading flows, second only to Jupiter.
- Despite being one of the main beneficiaries of the booming meme token trading volume on Solana, only 11.4% of Raydium's total trading volume currently comes from meme tokens.
- Trading Highlight: Raydium benefits from a rich ecosystem of third-party applications and protocols that utilize its core liquidity pools and trading infrastructure. The most notable is Pump.Fun, which after completing its initial bonding curve, migrated its liquidity pool to Raydium. Other teams leveraging Raydium's infrastructure include but are not limited to: MoonShot from Dexscreen, Trojan, BananaGun, FluxBot, BonkBot, Photon, and BullX.
LFJ
LFJ reached a cumulative trading volume of $130 billion and surpassed $5 million in revenue for 2024
- LFJ (formerly Trader Joe) is a blockchain token trading marketplace that launched in July 2021 and has since facilitated over $130 billion in cumulative trading volume. In 2024, LFJ added over $30 billion in trading volume, doubling last year's figures. This growth is primarily attributed to increased trading activity on the Avalanche network, where LFJ holds a dominant position.
- LFJ allocates 5%-25% of trading fees to $JOE token stakers, distributing an average of $550,000 in stablecoins per month in 2024, a 109% increase from last year. Since 80% of revenue comes from Avalanche, the increase in on-chain activity has brought significant value to JOE stakers.
- The $JOE token has reached its issuance cap of 500 million, with a current circulating supply of about 380 million. Due to the lack of a fixed reward program, JOE is rarely used as a liquidity reward. To date, the amount distributed to yield farmers is less than $100,000, while maintaining over $5 million in positive revenue.
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