Growth of decentralized exchanges: trade analysis, trends and prospects

According to the analysis, trading volume on decentralized exchanges (DEXs) reached nearly a trillion dollars during the past year, totaling $960.69 billion. Activity on DEXs in December surpassed the previous high of 2023 by $132.26 billion, with total swaps of $135.86 billion.

In the early days, DEXs were insignificant in the market, but in recent years they have become leaders compared to the large centralized exchanges. Data from defillama.com shows that in the last 24 hours, global trading volume on the DEX totaled $7.4 billion.

This week, transaction volume on these platforms is down 11% from the previous week at $32.83 billion, with Uniswap, Pancakeswap, Orca, Curve Finance and Thorchain among the leaders in trading volume on a weekly basis.

Trading volumes on the DEX this week indicate that December's strong performance may continue into the new year.

In terms of total blockchain value (TVL), Uniswap leads the way with $3.76 billion, followed by Pancakeswap with $1.65 billion, Curve with $1.62 billion, Balancer with $954.85 million and GMX with $619 million. Given December's record trading volume and fluctuating weekly figures, DEX not only presents a challenge but is changing the crypto economy.

Traders who have mastered this area will make the trajectory of DEX an important indicator for the emerging world of crypto trading in the coming year. DEX protocol volumes reflect the trends of centralized exchanges, with December, March and November being the peak months of activity in 2023.

Although DEX turnover last year was $960 billion and centralized exchanges (CEX) had $1.1 trillion in December alone, all of 2024 will be a growth year for DEX.

With more pressure on CEX, more traders will turn their attention to DEX. This could narrow the trading volume gap between DEX and CEX, which is now 13 times, by the end of 2024.

This will be encouraged by strict regulatory and taxation measures, as is already happening. For example, South Korea has decided to exclude funds held in wallets such as Metamask from taxation.

South Korea's National Tax Service (NTS) explained that residents holding digital assets in decentralized wallets are not subject to the country's foreign financial account reporting requirements.

Consequently, Korean residents storing cryptocurrency in Metamask do not need to report their assets to the IRS.

Thus, traders can legally trade on DEX, making profits or storing their assets without reporting to tax authorities using services like Metamask.

Similar laws will soon appear in other countries, leading to an explosive growth of trading on decentralized exchanges.