Haseeb Qureshi, managing partner at Dragonfly Capital, and Dan Robinson, research partner at Paradigm, discuss the explosion in decentralized exchange activity on automated market makers from $1 billion earlier this year to more than $10 billion in August.
Why trading in automated market makers has 8xed in a few months
how automated market makers work, and how specific dexes can specialize for the assets being traded on them
why traders would prefer to trade on a dex vs. a centralized exchange
how incentivized pools have drawn traders and liquidity
why trading on a dex seems can be more appealing than on a centralized exchange
why trading on dexes now mirrors trading on Binance in 2017
how "DeFi is the hottest coolest place where people are making a lot of money"
the difference between the metrics of liquidity, trading volume and total value locked for a dex
why AMMs are capital inefficient
what it means that fees paid on Uniswap are about half of those paid on Bitcoin
what the purpose of liquidity mining is
why Haseeb doesn't think that dexes have network effects and that once professional market makers come in the space, Uniswap will lose market share
whether users will use DeFi directly through the dexes or through another interface
why Dan thinks that DeFi is now comparable to financial investment in the 1970s
whether or not yield aggregators like yEarn make it harder for AMMs to compete
what happened with the CRV token launch
initial dex offerings or initial DeFi offerings, like the UMA token launch
whether, because of the high fees on Ethereum and the how long its transition to Ethereum 2.0 will take, DeFi activity could move to another blockchain such as Solana
where DeFi will go over the next few years
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Episode links:
Haseeb Qureshi: https://twitter.com/hosseeb
Dan Robinson: https://twitter.com/danrobinson
Haseeb’s post on the rise of AMMs: https://medium.com/dragonfly-research/what-explains-the-rise-of-amms-7d008af1c399
Haseeb's post on how Uniswap could be un-bundled: https://medium.com/dragonfly-research/unbundling-uniswap-the-future-of-on-chain-market-making-1c7d6948d570
Dex volume: https://defiprime.com/dex-volume
Trading volume on centralized exchanges: https://www.theblockcrypto.com/genesis/74539/july-by-the-numbers-a-look-at-crypto-exchange-volumes-open-interest-and-miner-revenue
Incentivized pools: https://pools.fyi/#/?tag=incentivized
Top dexes by trading volume: https://www.coingecko.com/en/dex
Ethereum transaction fees: https://bitinfocharts.com/comparison/ethereum-transactionfees.html
Uniswap website visits 15x in July: https://messari.io/article/uniswap-total-website-visits-grew-15x-in-july
Website traffic to DeFi platforms explodes in July: https://www.theblockcrypto.com/post/74231/defi-platforms-web-traffic-july
Fees paid to various crypto projects: https://cryptofees.info
Curve reaches $1 billion in TVL: https://www.theblockcrypto.com/linked/75014/curve-becomes-third-defi-protocol-to-hit-1-billion-in-total-value-locked
The Block on dex aggregators: https://www.theblockcrypto.com/genesis/69468/dex-aggregators-user-experience
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