DEXs activity expanded in the past month with ongoing meme token boom

Decentralized exchanges (DEXs) keep expanding their presence and rearranging their influence. In the past month, the activity of DEXs continued to grow, with more inflows of users to top platforms.  

DEXs activity continued to expand, boosted by a shift to the hottest spots for meme token activity. The balance of influence is also shifting, as Raydium outpaced Uniswap with percentage growth in the past four weeks. Raydium continues to list about 1% of new meme tokens that start out on Pump.Fun.  

Raydium has been the leading DEX in the past five months, constantly improving its market share with new listings and the trading of already existing meme tokens. 

The closing volumes in August will also give more clarity for the performance of DEXs in H2. In July, DEXs trading expanded to levels not seen since the market peak in March. The Ethereum DEXs ecosystem moved with the rest of the market, with Uniswap reflecting peak market days. 

DEXs activity is around 12.2% of the volume on centralized exchanges due to the unofficial nature of liquidity pairs. Trading on DEXs still hinges on whales providing liquidity, with more unpredictable inflows and outflows.

DEXs growth affects underlying networks

The Solana ecosystem grew its liquidity in the past months, reflecting the bigger share of meme trading. Tools available for DEX users also shifted, with dedicated routers and block builders taking a large share of the traffic. 

The usage of DEXs also affects the working of Ethereum, with more blobs added to each block. The addition of blobs means users have shifted to cheaper, high-volume networks, which send transaction blobs to the main chain. 

Smaller multichain exchanges are also growing even faster due to the low baseline activity. The chief competition is still between Ethereum-based markets and the emerging Solana trades. In the past week, however, Pancake Swap also reawakened, driven by increased bot activity on Binance Smart Chain (BSC). 

In the past two weeks, BSC exchanges got a boost from the acceleration of the bot trading wars. For now, the leader of DEXs sniping is still BonkBot, with Solana having the biggest share of fast, bot-driven swaps. 

DEXs activity has not returned to the peak of 2021 in terms of volumes. However, the past two months have closed in on the 2021 achievements with expanded trading volumes. The results of 2024 are also happening without all-time highs for assets while also carrying a growing number of tokens and swaps. 

Exchanges become key revenue generators

The increased volumes led to more than 300M swaps on Uniswap in the year to date while expanding the list of newly launched tokens. 

JupiterDEX is the third most active service for routing and finding the best swap prices. DEXs are still extremely competitive when it comes to including fast transactions, and not all swaps are priced the same. High-speed trading and guaranteed transaction inclusion are still expensive, even for Solana users.

Raydium still holds more than $1B in reported liquidity, while Uniswap is the leader with $4.75B. The biggest difference in decentralized services, however, is between DeFi protocols and token-trading hubs. The latter produces much higher fees, with $7M for Uniswap on a weekly basis and up to $3.59B in fees from Raydium. At the same time, protocols like Curve and Balancer show a much lower turnover of fees under $500K weekly. 

The Aerodrome DEX is also trying to graduate among top trading hubs, already achieving $1.41M weekly fees. Overall, DEXs thrive when tied to a top L1 blockchain or one of the leading L2s like Arbitrum or Base. In terms of trading volumes, DEXs are also relatively agile, easily doubling their activity when trading interest returns. According to TokenTerminal, top DEXs increased their volumes in a range between 40% and 178%, with Uniswap expanding weekly activity by 88%.

 DEX tokens also have their own narrative and may reverse the downward trend in terms of market price. The valuation of DEX tokens is still low in proportion to the volumes and fees generated. The entire category of DEX tokens is valued at $15.6B, with more robust performance from the assets linked to the top DEXs in terms of volumes and growth.

Cryptopolitan reporting by Hristina Vasileva