Group items tagged

"We compare decentralized blockchain-based venues (DEXs) to centralized crypto exchanges (CEXs) by assessing two key aspects of market quality: market liquidity and price efficiency. A comprehensive analysis of transaction costs and deviations from the "triangular" no-arbitrage condition suggests that market liquidity in CEXs and DEXs is similar but DEX prices are less efficient. While the main frictions for DEXs are high exchange fees and the gas cost of transactions stemming from proof-of-work blockchains, the superior price efficiency of CEXs involves significant risks and latency associated with delegated custody. We propose and empirically validate a stylized model of DEX liquidity provision, linking trading volume, exchange fees, and liquidity in equilibrium. Our theory identifies the quantitative conditions for DEXs to overtake CEXs in the future."

The Bank of Jamaica (BOJ) has reportedly officially launched Jamaica's JAM-DEX central bank digital currency (CBDC)  through the Lynk app on July 25.  Lynk is currently the only transaction platform for Jamaicans to use their JAM-DEX. As part of the launch, the first 100,000 customers that signed up for JAM-DEX via the Lynk app were given an incentive bonus of $2,500 JAM-DEX in their wallets by the Government of Jamaica.

Decentralized exchanges (DEX) are on track to surpass previous all-time high volumes. They have already transferred more than $27 billion in transaction volume so far in January, the second-highest total since September 2020's $29 billion. DEX use smart contracts on blockchain networks like Ethereum to let users swap between digital assets without transferring tokens to an exchange wallet or verifying their identity. Uniswap is the most popular DEX, responsible for more than 45% of volume in the last week, with Sushiswap accounting for more than 22%.

"DeFi and DEXs have recently attracted much attention. Uniswap raised in October 2022 a $165 million Series B funding round that valued the company at $1.7 billion, and DEXs globally are profiting from the hit that confidence in CEXs suffered following the FTX fallout. We provide in this first article a general overview of DeFi, DEXs and DAOs, focusing on Uniswap V3. In the second part of this article, we will cover a more technical analysis of price discovery and on-chain/off-chain arbitrage opportunities."

The Jamaican government launched two new incentive programs to increase the adoption of its JAM-DEX central bank digital currency (CBDC). The first is the "Small/Micro Merchant Incentive Program", which will reward the first 10,000 merchants who sign up for the official JAM-DEX platform as of April 1, 2023, with a J$25,000 (about $164) deposit. The second is the "Wallet-holder Individual Loyalty Program", which provides regular JAM-DEX users with loyalty points that may be redeemed for things such as 2% cashbacks on qualified purchases. https://jis.gov.jm/media/2023/03/HMFPS-BUDGET-PRESENTATION-Edited-Final-E-.pdf

The Bank of Jamaica (BOJ) is reportedly working to upgrade user-facing payment infrastructure to ramp up acceptance of its JAM-DEX central bank digital currency (CBDC). That will include funding the upgrade 10,000 of the more modern point-of-sale (POS) machines to support the JAM-DEX QR codes. Once the upgrades are done, the BOJ will relaunch its JAM-DEX marketing campaign to hopefully jump-start the underwhelming reception so far. However, the POS upgrades will still leave over 40,000 older machines that are not upgradable. https://www.centralbanking.com/benchmarking/financial-stability/7960528/richard-byles-on-jamaicas-inflation-targeting-baptism-of-fire

The OECD published a paper that provides evidence of increased concentration of decentralized finance (DeFi) liquidity provision in decentralized exchanges (DEXs) and automated market makers (AMMs). A low trade count is observed in liquidity pools where DeFi liquidity provision is concentrated, with 20% of the pools of some of the DEXs examined accounting for more than 90% of the trading volume of these DEXs. Also, a small number of liquidity providers participating in the examined pools represent a significant part of the trading activity. This could exacerbate DeFi vulnerabilities, with possible impact on market functioning, price discovery, and competitive dynamics.

Decentralized exchanges (DEXs) ended the month of February with the highest monthly volume on record, according to data gathered by The Block. February's monthly volume hit a new high of approximately $72.89 billion, increasing by $12 billion from January. Uniswap continued to lead in the DEX space, making up most of the monthly volume with $36.6 billion. SushiSwap and Curve came in second, hitting $14.93 billion and $4.42 billion respectively.

Weekly trading volume on decentralized exchanges (DEXs) exploded over the summer, peaking at over $8 billion in late August, thanks in large part to decentralized finance (DeFi) protocols offering new incentives with the potential for huge returns. Sam Bankman-Fried, the CEO of crypto exchange FTX, claims that the summer surge was due to "fake volume" caused by trading between "trans miners" aimed at earning reward tokens that most DEXs were paying. Once they stopped paying people to fake volume all the volume went away.

For the first time, monthly trade volume on decentralized exchange (DEX) Uniswap exceeded that of centralized exchange (CEX) Coinbase. During September, Uniswap saw approximately $15.4 billion in volume - making up 65% of the total reported by DEXs for that month, versus Coinbases's $13.6 billion. The DEX-to-CEX ratio rose to 13.9% in September, a new high. In August, that ratio was 6.06%.

Binance, the world's largest crypto exchange by adjusted volume, has launched its decentralized trading platform (DEX). A DEX enables users to trade P2P, using smart contracts to automate deal matching and asset liquidation.

Governor of the Bank of Jamaica (BOJ) Richard Byles reportedly says the central bank is "determined" to make its Jam-Dex central bank digital currency (CBDC) work despite the slow take-up. The main reason is merchant adoption, with most of the larger merchants preferring that Jam-Dex payments go through a single point-of-sale machine, so BOJ is testing a solution that uses a dynamic quick response (QR) code. Also, only one bank is able to facilitate Jam-Dex transactions, although three more are expected to step up to the plate soon.

A decentralized exchange or DEX is a place where people can go to trade cryptocurrencies without an intermediary. To better identify what a decentralized exchange is, it's important to first understand how centralized exchanges work.

"If the GameStop saga proves to be more than just a momentary anomaly, we might presently be witnessing the emergence of a profound change in the financial system or the creation of an entirely new one. As financial technology companies made it easier for consumers to participate in financial markets, DEXs are tackling the flaws of centralized markets. In some ways, this generation of DEXs may become the new Robinhood's. Perhaps this is one of those moments where the people, and not institutional legacy, will define the future."

January decentralized exchange (DEX) trading volume soared to set an all-time high of $56 billion, eclipsing the previous record of $26 billion from September 2020, according to data from Dune Analytics. Uniswap represented over 45% of total DEX volume ($26 billion traded in January) with Sushiswap claiming nearly 22% ($12.2 billion).

The humble DEX has come a long way since the days of Etherdelta, and the scope and quality of decentralized trading platforms has evolved greatly. As an examination of several new and emerging platforms shows, DEXs can finally hold a flame to CEXs.

Decentralized non-custodial crypto trading platform ShapeShift will sunset its 6+ year business of trading directly with customers and now route orders through decentralized finance (DeFi) applications to get rid of know-your-customer (KYC) requirements. These multiple decentralized exchanges (DEX) will include Uniswap, Balancer, Curve, Bancor, Kyber, 0x, mStable among about a dozen others. DEXs, which operate as trading systems on top of blockchains, such as Ethereum, have eaten into centralized exchange volumes over 2020. For example, Uniswap cites itself as the fifth-largest spot-trading crypto exchange. https://erikvoorhees.medium.com/no-more-kyc-with-shapeshift-6d95a3e63ddf

With a few days left in February, decentralised exchange (DEX) processing volumes during the month have surpassed $60 billion, according to Dune Analytics, already higher than January's record level.

According to a CipherTrace study 56% of virtual asset service providers lack strong know-your-customer (KYC) practices, and 81% of decentralized exchanges (DEXs) have little-to-no user verification. The study analyzed more than 800 cryptocurrency exchanges, as well as over-the-counter trading desks and other kinds of service providers. It looked at 21 DEXs, which have seen massive trading volume growth over the past year, and are designed to let users exchange currencies without a third party and therefore bypass certain regulatory obstacles.

The OECD published a report that analyzes the connection between decentralized finance (DeFi) protocol liquidations and price volatility in decentralized exchanges (DEXs). The analysis employs transactional data of three of the largest DeFi lending protocols and suggests a positive relation between liquidations and post-liquidations price volatility across the main DEX pools. It also shows a positive correlation among borrowing rates and across different assets, which indicates that the liquidity in DeFi lending pools is connected, and that at extreme events, when investors pursue the same strategy at large numbers, liquidity of a particular asset may dry up in each of the pools across protocols. This implies that the liquidations mechanism might be limited in its ability to restore liquidity, as liquidators themselves rely on the liquidity available in the pools to repay underwater loans.