The rise of DeFi: dYdX leads the charge

The rise of DeFi: dYdX leads the charge

By I-HODL | A Crypto Journey | 27 Sep 2021

With China on a warpath, shutting down Bitcoin mining operations and forcing the largest centralized cryptocurrency exchanges to evict Chinese traders faster than it took the new regulation's ink to dry on paper, these erstwhile traders in search of a new home are finding love in the arms of the decentralized exchange, chief among them, decentralized derivatives exchange dYdX. A lot's been going on, guys! Let's talk about it.

So, China is playing no games. The country is banning everything, from video games during the week to Marvel movies and crypto mining. For some, however, Friday's ban on crypto transactions, in a thrust which appears geared to drive adoption of the state backed digital yuan,  is the mother of all bans

DeFi to the Rescue

According to this Investopedia definition, DeFi, short for decentralized finance, represents a system by which financial products become available on a public decentralized blockchain network. They are open to anyone to use without the involvement of middlemen like banks or brokerages. In the world of DeFi, a government-issued ID, Social Security number, or proof of address is not necessary to complete a transaction. Buyers, sellers, lenders, and borrowers interact peer to peer or with a strictly software-based middleman facilitating the transaction. And so, ah ha!

DeFi tokens surge following China's ban

As a result of China's bans, DeFi platforms have seen a surge in trade activity and a subsequent rise in the value of their tokens. Among these are decentralized derivates exchange dYdX, Uniswap (UNI), Sushiswap (SUSHI), Perpetual Protocol (PERP), and others. Chief among those, is dYdX, founded by former Coinbase employee, Antonio Juliano. 

dYdX graph

Screenshot of graph from Messari

And, of course, with dYdX, surging 170% in volume over the past 24 hours according to CoinMarketCap, AND currently reported by analytics and research website, L2BEAT as second after Arbitrum in total market share, with an estimated $478 million in total value locked, there is definitely a lot of celebration in the derivate exchange's camp which is just five years old and comprises just about 20 employees.


Seriously though, guys, unfolding events in China is certainly cause for the crypto community to pause and take note. This industry is still  relatively young and faces severe opposition from those with a vested interest in maintaining the status quo. Investors must continue to exercise caution in every transaction, for if there is anything we know for certain, it is that in the world of crypto trading, investing, and HODLING, there are no guarantees.

But that's it for me, guys. I'm off to indulge in a stolen pleasure: burning brain cells one by one on video games and it's only Monday.

I'd love to know, though, what are your thoughts on these latest developments? Do you think current developments portends a long term trend away from centralized trading and investment and towards private wallets and DeFi? Let me know below!

And, as I always close, until the next time, please be safe!


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Navigating the ebbs and flows of crypto trading, and writing about it.

A Crypto Journey
A Crypto Journey

There's nothing more exhilarating than navigating the ebbs and flows of crypto trading. I have sea legs today, but truth be told, I've been lost at sea more than I care to remember and I have weathered quite a few storms as a trader. But the crypto-verse has also rewarded my resilience, and so after every dip, I get right back to sailing in pursuit of me buried treasure. I love this digital evolution and am proud to be a part of it. These are the tales of a crypto adventure! 

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