Analysis of Monthly Performance of CEX and DEX: Crypto Exchange Report
The cryptocurrency industry continues to attract a lot of attention as more users join various platforms to engage in buying, selling, and trading digital assets. Within the industry, there are two main categories: Centralized Exchanges (CEX) and Decentralized Exchanges (DEX).
DEX Overview:
During January, DEX exchanges experienced a significant drop in valuation of over 10% compared to their performance in December. This indicates a shift in investor interest, as there was an outflow of digital assets during this period.
Market volatility also had an impact, with inflow and outflow volumes decreasing by more than 5%. This suggests that investors were holding onto their digital assets instead of actively trading them.
Total Value Locked (TVL):
Despite the volatility in the crypto industry, the Decentralized Financial (DeFi) system saw a rise in valuation from $117.54 billion at the start of the month to $121.435 billion on January 31st, a month-on-month increase of 3.313%.
Different subparts within the DeFi category displayed varying price actions, indicating mixed sentiment in the market. Lower cap chains outperformed the top chains in terms of monthly gains, with some experiencing returns of over 2X in valuation.
DEX Volume:
The crypto market started the year with high volatility and significant price action. Looking at the month-on-month data, DEX volume decreased by 13.8596%, from $84.49 billion at the start of the month to $72.78 billion by the end of the month.
Among the top five DEX exchanges, Ocra recorded the highest loss with a correction of 34.081%. PancakeSwap followed with a loss of 16.458%. Uniswap and Maker PSM both experienced corrections of 7.746% and 7.14% respectively.
On the other hand, Curve had a stable month with the least loss of 2.941% among the top exchanges. However, collectively, the other exchanges recorded a loss of 32.023% during the month.
DEX Share Volume:
Although Uniswap recorded a loss in volume, it still had the highest market share among the top five DEX exchanges. Its market share increased from 57.63% to 61.71% during the month, making it the top gainer in this subpart.
Curve also saw a rise in market share, increasing by 0.52% during the month. Orca, on the other hand, had the highest correction among the top five exchanges, with a loss of 2.73% in value.
DEX to CEX Spot Trade Volume:
The DEX to CEX spot trading volume, which calculates the percentage of DEX volume divided by CEX volume, recorded a decline from 7.88% to 7.70% during the month.
DEX Mechanism Volume Share:
The DEX mechanism volume share includes Constant Product Conservation Function (CP), Hybrid mechanisms, and Central Limit Order Books (OB). The Constant Product subpart saw a rise from 78.21% to 81.5%, while the Order Book had the highest rise of 14.772%. The Hybrid mechanism, however, experienced a loss of 16.355%.
CEX Overview:
Centralized exchanges saw significant fluctuations in their valuations due to increased price volatility. Binance, in particular, faced regulatory pressure throughout the year and experienced a notable fall during the first month.
Proof-of-Reserve (PoR):
The current valuation of Proof-of-Reserve is $71.388 billion. Bitcoin holds the highest token allocation with 34.22%, followed by USDT with 26.29%. Ethereum holds a share of just over 10% at 10.23%. BNB and AETH hold 4.19% and 2.62% respectively, while other tokens hold a total of 22.46%.
The top five exchange reserves in the industry are dominated by Binance with an aggregated balance of $27.9 billion, accounting for 39.082% of the total valuation. OKX, Deribit, Crypto.Com, and Bitstamp follow with balances of $5.62 billion, $1.51 billion, $1.29 billion, and $970 million respectively.
Revenue:
Centralized exchanges recorded 4 out of 7 green days, 2 out of 7 red days, and 1 neutral day in terms of daily P&L. The highest single-day P&L gain was $1.644 billion on January 29th, with a cumulative P&L of $1.523 billion.
However, the crypto industry concluded the month with a red day, as the daily P&L recorded a loss of $1.649 billion, resulting in a cumulative gain of $298.335 million.
Inflow and Outflow:
The crypto market experienced high volatility, with major cryptocurrencies seeing significant fluctuations in their values. Bitcoin’s exchange inflow averaged 40,349.290 daily in January, with the highest inflow of 70,892.96 on January 12th and the lowest of 18,265.67 on January 21st.
Similarly, Bitcoin’s exchange outflow averaged 40,389.870 daily, with the highest outflow of 68,292.338 on January 12th and the lowest of 18,811.47 on January 21st.
Exchange Volume:
Among the top cryptocurrency spot exchanges, Binance had the highest score of 9.9, average liquidity of 886, and 400 supported coins. Coinbase Exchange followed with a score of 8.4, average liquidity of 734, and the least weekly visits of 68,781 and 239 coins. Kraken, KuCoin, and Bybit also ranked high in terms of liquidity and score.
Conclusion:
Decentralized exchanges (DEX) are still in their early stages and hold roughly 15% of the total market share. However, the rising volatility in the industry and changing regulations have started to attract investors towards DEXs.
It is important to exercise caution when trading on any exchange, as exchanges are not liable for any transfers made by the crypto holder.