A new CoinGecko report shows that spot trading volume on DEXs dipped by 31% throughout Q3. THORChain however managed to gain 113%, but not for reasons you’d expect.
Compared with Q1 and Q2, the third quarter of 2023 was somewhat slow. The total market capitalisation of the crypto market dropped by 10% and NFT trading volume slumped by 50%, according to a new report by CoinGecko Research.
Decentralised exchanges (DEXs) took a particularly hard hit, with spot trading volume dropping by -31.2%.
A DEX is an exchange that operates without a central authority, allowing users to transact directly and securely without an intermediary. Compared with centralised exchanges (CEX), such as Binance and Coinbase, they offer increased privacy and closer control over funds, making them a favoured choice for seasoned crypto investors.
Q3 saw a total of $105 billion spot transactions across DEX platforms, which is nearly one third lower than the previous quarter.
The Ethereum network captured most of this volume ($67.1 billion), followed by Arbitrum.
The report shows that Uniswap remained the most popular DEX, capturing on average 63% of the total trading volume. PancakeSwap came second, with a 9.5% share. SushiSwap however, a popular DEX which launched in 2020, saw such a slump throughout Q3 that it dropped out of the top 10 and was replaced by Orca instead.
THORChain gained big, but not for the right reasons
CoinGecko Research shows that THORChain, a DEX which launched in 2019, saw approximately $1.27 billion in spot volume throughout Q3, representing an increase of +113%.
On-chain data however shows that bad actors may have used THORChain to move illicit funds. In June 2023, North Korean hacker group Lazarus drained more than $100 million in funds from Atomic Wallet.
Blockchain sleuth MistTracker found that the hacker’s address transferred 503.08 Ether, approximately $870,000 at the time, to THORChain to swap Ether for Bitcoin.
Read more: Atomic Wallet still can’t explain what caused hack that led to $100M in losses
THORChain has since taken a stand against criminal activity on the network and took measures to pause the platform for “maintenance” earlier this month after illicit funds originating from the last year’s FTX hack were transferred onto the platform.
How are CEXs faring?
CEX trading volume is also down, but to a lesser extent. Centralised exchanges recorded $1.12 trillion in spot trading volume throughout Q3. While the number is still very high, it’s a 20.1% decrease from the previous quarter.
Binance was hit particularly hard, with its market dominance dropping below 50% at some points. This is likely due to the volatile year it’s had, namely due to its ongoing regulatory battle with the US Securities and Exchange Commission (SEC), which accuses it of blatantly ignoring securities law.
Q3 was particularly strong for HTX, formerly known as Huobi, which saw an 86% increase in its trading volume.
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