In this analysis, I focus on my goal: Analyze the DEX Catelogy in the current market context. Since the summer of 2020, DeFi has emerged as a craze where the AMM and Lending protocols received a lot of attention and caused them to skyrocket after that.
In early 2021, DeFi growth is slower than in 2020. Therefore, each project in the puzzle must have its own strategy to protect its position.
The analysis focuses on the Top AMMs, including Uniswap, Sushiswap, Bancor, Balancer, Traderjoe, Pancakeswap and Osmosis, which are active in the market and evaluates their specific strategy over time, thereby helping us has a good overview and assessment for the AMM industry.
Top-Down analysis.
2021 is an explosive year for the financial market in general and Cryptocurrency in particular. Global stock markets have posted record growth through economic stimulus packages. The market reached an all-time high capitalization of over $121.94T, up about 11.66% from 2020. The Compound Annual Growth Rate (CAGR) of the global equity market from 2013 to the end of 2020 is about approx 7.23%.
With a CAGR of 7.23%, the global stock market is forecast to reach $131T (2022) and $140T (2023).
The Cryptocurrency market alone has an amazing growth rate – a characteristic of an emerging market. This comes from waves like Defi, and emerging trends like NFT, GameFi or Metaverse. Market capitalization has grown 16x since the end of 2020, from $191B to $2.3T end of 2021. The CAGR of the Crypto market from 2013 to 2021 is 83.25%, showing that the growth rate of investment in the Crypto market is extremely high, compared to the global stock market (7.6%).
Market capitalization has seen a notable decline since peaking in November 2021, currently at $1.3T, down 58% from its 2021 peak. However, it still grew 6.5 times compared to the beginning of 2020.
If compared with the world stock market, the Cryptocurrency market only accounts for a modest 2.5%!
In 2021 we also see the explosion of Defi with more than 30 Altchains and hundreds of Dapps born, most of them are very successful, such as Solana, Fantom, Avalanche, …. The above ecosystems have proven to be replaceable and (maybe) good than Ethereum in certain respects. The explosion of many ecosystems and Dapps has helped the Defi market capitalization increase rapidly from $20B to $175B (according to Coinecko), 7.5 times higher than at the end of 2020.
CAGR of DeFi Market between 2017 and 2021 achieve 35.72%
At the conclusion of Q1 2022, the DeFi market valuation had dropped marginally from $150 to $141 billion. Before the Q4 2021 run-up, these levels were last seen in mid-October of last year. This is in sharp contrast to the previous quarter when revenue increased by 29% to $150 billion by the end of 2021.
Even though the global market valuation has fallen by 3%, DeFi’s market share has stayed relatively steady at 6.3%.
According to Defillema, the total value lock of the whole Defi market is already $94 billion, with over 1,100 protocols. The TVL of the whole Defi market peaked at $223 in early January 2022. TVL is currently down 58 percent from its previous high.
Centralized Crypto Exchanges (CEX) Market
The quick emergence and prosperity of DEXs had an effect on the CEX empire. Many CEX exchanges have introduced a variety of programs to entice users to join their ranks, including staking programs, large financing packages for project development, and establishing their brand in real life. As an example:
CEXs have demonstrated that their status, influence, and empire are still quite powerful. CEX’s market value has increased by up to 1,200 percent since the end of 2020, with a total market capitalization of $145 billion. By the end of 2021, it will be 6 times higher than the overall market capitalization of DEXs, which will be just $22.56 billion.
AMM Decentralized Exchange (DEX) Market
According to DEX trends, DEXs have also plummeted since mid-Q3 2021. So far, Dex Market Capitalization is close to $5B, down 80% since September 2021.
The reason for this trend is slowing down because (probably) the current DEX exchanges do not have many highlights. Most of them fork according to Uniswap’s model, incentive programs are less attractive, making the Dex field no longer as attractive as the “Defi Summer” period in mid-2020. At the same time, the bad Setiment market also makes AMM DEX plummet in its capitalization.
The above is an overview of the market capitalization of Exchange Catelogy in recent times. We are seeing the sharpest drop in capitalization since the DeFi Summer 2020 boom. However, this Catelogy still plays an important role in the operation of DeFi, as part of the development of any ecosystem. The above analysis will give you an overview of Exchange Catelogy.
If you have any questions, comments, suggestions, or ideas about the project, please email ventures@coincu.com.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.
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