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Data Shows Decentralized Finance Took a Hit in Q2 but Is Still Booming – Bitcoin News

Although decentralized finance took a hit in the second quarter, statistics show that there is still significant movement in these protocols. Data from Messari’s Q2’21 defi review shows that decentralized exchanges are busy trading key numbers.

Decentralized finances bruised but still up

The decentralized financial paradigm took the market by storm this year and while it certainly took a beating, it is still healthy. According to figures from Messari’s Q2’21 defi review report, there is still significant activity going on in the decentralized market. Decentralized exchanges, one of the core engines of the ecosystem, still move significant amounts of money. These settled $405 billion in the last quarter, up 83% from the $221 billion settled in the first quarter.

However, foreign exchange volumes declined to $95 billion in May from $203.5 billion in May. The general slowdown of the cryptocurrency market has significantly impacted the sector. In any case, June was a remarkable month in the decentralized exchange story, even with the precipitous decline.

Uniswap V3 was launched during the second quarter and became the dominant force in the area in less than two weeks. Uniswap V3 now settles 40% of the exchanged volumes in decentralized financing. Pancakeswap, the top exchange on the Binance Smart Chain (BSC), follows in third place with declining volumes after the May crash.

Reaching Institutions

Some of the top protocols in the decentralized environment are expanding into institutional markets to expand their reach into more stable companies. This is the case with Compound, a leading decentralized exchange that last month launched Treasury, a fixed-reward product for companies. Metamask, the wallet of choice for decentralized finance, also launched an initiative last April to conquer the segment of institutions looking to dabble in the defi ecosystem.

With current interest rates, each of these institutions can propose a product that offers greater returns than traditional financing products. Aave, another decentralized financial protocol, will also offer Aave Pro later this month to attract these institutional players.

In a similar vein, Circle, part of the USDC-issuing consortium, will go public later this year through a SPAC deal. While Tether still holds most of the stablecoin dominance, USDC has gained popularity over decentralized financial protocols in the last quarter.

What do you think of defi’s performance during Q2 2021? Tell us in the comment section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

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