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DeFi Activity Down During Crypto Dump

Posted by
Robert Hoogendoorn

Uniswap, PancakeSwap, and QuickSwap see drop in activity as market turned red

While crypto prices have been plummeting over the past 24 hours, DeFi trading protocols have seen a decrease in activity during the dump. Uniswap, PancakeSwap and QuickSwap all saw less users make trades on their platforms.

While the crypto market lost 20% of its value thanks to euphoric traders being overleveraged and then getting liquidated, DeFi platforms like Uniswap, PancakeSwap and QuickSwap also noticed the crypto dump. 

Amidst the blood bath, which is still happening at the moment of writing, the amount of active wallets on Uniswap dropped 6% to 20.86k. The drop on QuickSwap has even been more notable, as the amount of user wallets dropped almost 12% to 19.4k unique active wallets. PancakeSwap dropped almost 5%. 

We see a similar drop on a wider industry level, as the number of active wallets in the Exchanges category dropped from 93,000 on Monday to 86,000 on Tuesday. Even more notable, the number of transactions on Ethereum dropped to its lowest point in 30 days, 146.7k transactions on Tuesday.

Source: DappRadar, Industry Overview

QUICK, CAKE and UNI all down

At the time of writing QUICK is down 19%, the same percentage for UNI, while CAKE even dropped 23% in the past 24 hours. However, these are trades happening with leverage on centralized exchanges like Binance and Bitfinex. Each of these tokens belongs to a decentralized exchange where traders don’t use leverage. They simply swap. 

UNI has been having a rough week anyway. At the moment of writing UNI has seen the biggest loss (-24.3%) of all cryptocurrencies in the top 100 over the past 7 days. With 9th spot on that same list, PancakeSwap’s CAKE token (-19.3%) didn’t perform much better. QUICK, outside the top 100 token list according to Coingecko, dropped 17.2% over the past 7 days. 

Trading tokens can also be done on DappRadar through our Token Swap page. Users get direct access to the best trading prices across a variety of protocols on Ethereum, Polygon and BSC.

What does the drop in activity mean

Even though it’s interesting to see a correlation between dapp activity and price action, it’s not something to worry about. DeFi dapps work within the market and prices are established between the users themselves. DeFi will function, but indeed prices will fluctuate. It’s important not to put one’s life savings into crypto trading. 

Nonetheless, DeFi is a growing business, and even games become part of this ecosystem. After a massive summer in 2020, the DeFi space appears stagnant. Whilst there is no sugarcoating for the decrease in DeFi usage, the numbers are not particularly dire. In August, 641,000 unique wallets interacted with DeFi dapps, a 2% decrease from July’s numbers. 

The DeFi industry’s Total Value Locked (TVL) stands at $114 billion at the time of this writing. However, before the crypto dump the DeFi sector had $134 billion TVL. That means that the crypto dump wiped away roughly $20 billion from the DeFi market. Ethereum is still the leading blockchain in terms of TVL. Read more about the developments in DeFi in our Dapp Industry Report for August.

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