Will DEXs Recover? - CRYPTO FRIDAY

Dec 11, 2020

Hey DEFI TIMES community,

the total month to date volume of all DEXs combined is at $4.7 billion. If this development continues, we will shoot below the last month’s volume for the 3rd time in a row. Many of you are probably asking yourself: are DEXs dead? Well, the monthly DEXs volume chart certainly doesn’t look pretty!

Let’s put things into perspective: DEXs are an essential part of the DeFi ecosystem. If DEXs die, DeFi will die too. So, the question you need to ask yourself is: will DeFi die?

In our last CRYPTO FRIDAY thought piece, we looked at the altcoin season index. Let’s have a quick recap.

Notice a pattern if you compare the DEX volume with the altcoin season chart? It seems like DEX volume is highly correlated with how much attention currently is on altcoins.

Last Friday, we also talked about a potential trend reversal of the altcoin season index. If this turns out to be correct, the DEX volume might increase significantly again.

So why are we talking about this? There are several ways you can use this to your advantage. We will cover two of them today:

1) Become a liquidity provider

By becoming a liquidity provider, you earn trading fees when DEXs are being used. If you provide liquidity now, you might have a chance to earn more trading fees when the hype starts because you might be earlier than other LPs.

2) Buy DEX tokens

Buying DEX tokens might be a good idea if you bet on rising DEX volume. Kyber Network, for example, distributes a portion of its trading fees to all token (KNC) holders, just like a dividend. Obviously, the higher the DEX volume, the more you earn.

That’s it for today’s thought piece. As always, you can read on for the most important news this week!

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AAVE V2

Aave @AaveAave

👻It's the moment we've all been waiting for... Aave V2 is live on mainnet! 🍾🎊 Head over to app.aave.com to try it out Check out the Aavesome new features, security & audit details, and more in the latest blog post: medium.com/aave/the-aave-…

The Aave Protocol V2The Aave Protocol V1 launched at the beginning of this year, with the goal of unlocking value in DeFi and improving the user experience. The protocol quickly grew to over $1B market size in less than…medium.com

Aave V2 is now live on mainnet. It has the following features:

- Yield & Collateral swap

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ETH - DAI as collateral

Hayden Adams 🦄 @haydenzadams

1/ 🔥🔥🔥 A maker governance proposal was just put forward voting to add DAI-ETH and USDC-ETH Uniswap liquidity tokens as collateral This would allow Uniswap LPs to a) increase the capital efficiency of their liquidity or even b) modify their exposure in a meaningful way.

Maker @MakerDAO

A Governance Poll has been added to the voting portal to signal support for/against: Adding the following collateral types - 🪙AAVE (@AaveAave) 🪙UNI-V2-DAI-ETH (@UniswapProtocol V2 DAI-ETH LP Token) 🪙UNI-V2-USDC-ETH (@UniswapProtocol V2 USDC-ETH LP Token) More 👇

ETH-DAI Uniswap LP tokens are now proposed as potential MakerDAO collateral. If this proposal goes through, the ETH - DAI token will be the first trading pair token to be used as collateral.