- The recent increase in weekly decentralized exchange (DEX) trading volume on the BNB chain can be attributed to lower fees and the growing popularity of Binance, according to market analysts.
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Data source: (DeFiLlama)
Data from DefiLlama shows that the weekly trading volume of decentralized exchanges (DEX) on Binance’s BNB Chain has reached its highest level in a year.
During the week starting May 7, the decentralized exchange (DEX) volume on Binance’s BNB Chain reached $5.11 billion, which is the highest level seen since early May 2022. However, there was a previous instance of volume slightly exceeding $5 billion in the week following the collapse of the crypto exchange FTX in November.
Decentralized exchanges (DEXs) are becoming more popular, possibly due to increased regulatory scrutiny on centralized exchanges by U.S. authorities. In April, the trading volume of DEX Uniswap surpassed that of centralized exchange Coinbase for the fourth month in a row.
The recent increase in yearly trading volume on the BNB Chain can be attributed to a couple of reasons. According to Katie Talati, head of research at Arca, lower fees on the BNB Chain may encourage users to trade there more frequently. Additionally, Binance’s popularity as a centralized exchange could be another factor. Talati mentioned that it’s logical for users to continue trading on the BNB Chain after utilizing Binance’s services.
According to Charles Storry, head of growth at crypto index platform Phuture, the reason behind the surge in trading volume is linked to the opportunity for projects to be listed on Binance and the marketing support they receive from the Binance ecosystem. Storry explained that successful projects often get listed on Binance, which is a valuable but unspoken advantage. He also mentioned that many projects are seeking to benefit from their association with Binance and are actively leveraging this relationship.
Another important decentralized exchange to mention is Uniswap, which is currently the largest in terms of trading volume. In March, Uniswap expanded its operations to include the BNB Chain.
The deployment of Uniswap onto the BNB Chain a few months ago, combined with Binance being the largest cryptocurrency exchange, has attracted increased trading volume to the BNB Chain.
BNB Chain was created by the cryptocurrency exchange Binance, formerly known as Binance Smart Chain. It is described as a decentralized ecosystem driven by the community, as stated on Binance’s website.
This information is for general knowledge only and should not be considered as advice for investing or making financial decisions
