Combined DEX liquidity tags new all-time high of $10 billion

The amount of collateral on decentralized exchanges, or DEXs, is nearing a milestone high of $10 billion, with Uniswap still sitting at the top of the heap.

Volumes and liquidity on decentralized exchanges have surged in 2021, with collateral approaching a milestone high of $10 billion, according to research by Messari.

Researcher Rahul Rai noted that DEX volumes for February soared to a record $72 billion. DappRadar reports that Uniswap has over half of the total liquidity locked up in DEXs, with a total value locked of $5.4 billion.

Rai added that despite their success, automated market makers face their own set of challenges:

“A number of inherent problems such as impermanent loss (IL), capital efficiency, slippage, gas costs, speed, and multi-token exposure are holding them back.”

According to Dune Analytics, Uniswap’s dominance over the Ethereum-powered DEX sector is growing, with the exchange hosting roughly $6.5 billion worth of weekly trading, or 62.2% of combined trading across Ethereum DEXs.

Rival DEX SushiSwap, which was spawned in late August 2020 as a Uniswap fork and has big plans for 2021, is second place by volume — with $1.6 billion in weekly trades, or 15.2% of the sector's total trading.

Curve Finance is third in terms of market share with 6.2%, hosting $647 million worth of trading in the past seven days.

Decentralized finance aggregators are growing at an unprecedented rate, with volumes so far this year already dwarfing that of the entirety of 2020. The 1inch exchange is currently top in terms of volumes, with a little over $1 billion in the past seven days, according to Dune Analytics.

The sector’s combined volume for March has already tagged $44.3 billion — more than October and November 2020 combined.