The health of blockchain nations
You don’t have to be Justin Sun to know Decentralized Finance — or DeFi — is superhot.
Something of a catch-all term, it covers everything from token exchanges and protocols to specialized payment systems, derivatives trading, insurance, collateralized loans and more.
But, more generally, what’s fascinating about DeFi is how the new experiences we expect from blockchain technologies collide, merge and will eventually melt together with the hard learnings derived from hundreds of years of traditional finance — and not forgetting those rather important legal frameworks too.
Of course, the full ramifications of this will take years to work out so to start off a regular series of articles looking at this sector in more depth, we’re going to focus on the simplest area — the world of decentralized exchanges (or DEXs).
Perhaps the most significant aspect of such exchanges is their distribution across the three main dapp blockchains.
The 2017–2018 ICO boom — and the resulting explosion in ERC20 tokens — on Ethereum ensured it’s always had plenty of active exchanges.
That’s one of the reasons Ethereum still provides the most mature ecosystem for exchanges — including the likes of Bancor and Kyber — as well as most of the best-known DeFi products such as MakerDAO, Uniswap, Compound, Dharma and dYdX.
However, almost a year since the launch of EOS and TRON, both are now seeing increased DeFi activity too, albeit mainly exchanges, including the Bancor protocol, which is now operating an integrated DEX across Ethereum and EOS.
This is in stark contrast to other dapp categories, with games operating mainly on Ethereum, while gambling dapps predominant on TRON and EOS.
Yet the rise of token exchanges demonstrates that, at their own pace and in their own ways, all these blockchains are maturing and offering their users deeper experiences.
Of course, in the cases of EOS and TRON whether they can develop into as comprehensive platforms for decentralized finance as Ethereum is dependent on how their own token ecosystems evolve. After all, the point of a DEX is to exchange one token for another.
At present, the majority of exchange activity is driven by tokens from gambling dapps. But examples such as PLAT (BitGuild), SEED (Sesameseed) and BTT (BitTorrent) on TRON, and PEOS, pixEOS and IQ (Everipedia) on EOS — however nascent — demonstrate the first shoots of something more substantial.
As for the present, ranking the top 5 exchanges in terms of the numbers of users in the past 24 hours, there’s a fairly even split, with TRXMarket and TronTrade in the top two positions, followed by EOS-based Newdex and popular Ethereum exchanges IDEX and ForkDelta rounding out the top 5.
Re-ordering the list in terms of 7 day native token volumes (ETH, EOS and TRX respectively, priced in US dollars) sees three EOS exchanges — EOSDAQ, Newdex and WhaleEX — at the top, followed by IDEX, with EOS exchange Chaince in fifth position.
But, no doubt, over the coming weeks and months we’ll see plenty of changes as new products are released and existing dapps growth their user bases.