Decentralized exchanges are taking over the whales

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Decentralized finance, which is based on universal access to financial services, is still open primarily to large investors, according to digital asset data provider Kaiko.

“The average deal size across all Decentralized Exchanges (DEX) has grown in recent months, while the number of deals has not changed. This suggests that the profile of the average trader is now shifting towards the whales, ”the authors write.

The average deal size on the Curve Finance platform ranges from $ 500,000 to $ 1 million, and on popular decentralized exchanges such as Uniswap V3, Uniswap V2, SushiSwap and Balancer V1 – from $ 10,000 to $ 20,000.

At the same time, the average size of transactions on centralized exchanges is $ 2,000 – 4,000. At the same time, centralized exchanges process millions of orders per day, while large decentralized exchanges are less than 50,000. Curve and Balancer V1 have less than a thousand.

Kaiko analysts attribute the dominance of whales on decentralized exchanges to high fees on the Ethereum blockchain:

“The size of the deals is likely due to the high transaction processing fees Ethereum has, which makes decentralized exchanges unavailable for many retail users. Every DEX trader must pay a commission on every trade, which often exceeds $ 100 due to congestion and scalability issues.

DEXs need major improvements before they can close the gap with CEX, but they have significant potential to spin the structure of the cryptocurrency market away from centralized entities. More and more DEX is using Layer 2 protocols and alternative Layer 1 protocols such as Binance Smart Chain and Avalanche, which could make them less expensive and more affordable for small traders. ”

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