The Rise of DeFi
All the craze now days is the hype for DeFi. They even have new ideas popping up with trying to mix NFTs with staking, clearly an idea borrowed from DeFi and yield farming. The truth is all of this yield farming trend started with Compound and their air-drop mechanism. The team created a token with virtually no value or purpose at initiation and rewarded users using their service to borrow and lend crypto.
The crux is that before Compound started this, the go-to platform Maker had almost no real growth in real borrowers. You can see that before Compound airdrops/yield farming the DAI supply from Maker never showed significant growth.
Whatever the case is for real growth and demand for borrowing and lending in the DeFi space, now every one wants a piece of the pie. I acknowledge there were some projects like CURVE and YAM, YAM pre-bug fiasco, that were in it for the long run. But, some players in the market are in it for a fast cash crab.
Let's actually take a look at how Centralized Exchanges approached listing DeFi tokens between July and August. First take a look at the price change for Balancer and the dates relating to exchange listing.
Price Chart
Listing Annoucements
You can tell with the case for Balancer, that Centralized Exchanges started to take interest in DeFi tokens with the rise of Yield Farming in late June early July. Some major exchanges took notice of the value in listing those projects and started to look for the next Compound, which for the sake of this article I chose Balancer but could be any tokens really related to DeFi.
Balancer isn't the only prime example. The price took off for ChainLink because it was an oracle service provider for DeFi. One can observe the uptick in new listing announcements after the increase in DeFi interersts from the public.
So what is the DeFi, DEX, CEX conundrum?
The current status is that most major exchanges already listed the initial wave of DeFi related tokens. And now are looking at the volume in Uniswap, a DEX, to see what next listing would make sense most. Uniswap trading volume climbed up a lot recently and this is all thanks to DeFi tokens like Sushi.
Thus the situation we are in now where we have tokens like Sushi and a plethora of other DeFi focused tokens like Kimchi coming out left and right and traded on Decentralized Exchanges. The trade volume starts to become an indicator of which tokens will be listed on Centralized Exchanges.
I guess as the saying goes, "if you can't beat them, join them."
Better to keep an eye out for which tokens are rising in popularity in the new $3.00 transaction gas fee days on Ethereum, thanks DeFi. And in a time where every other crypto users are playing who wants to be a millionaire by guessing which DeFi token will rocket to the moon from DEXs.
In the end, whether or not DeFi really will be the use case to proliferate blockchain into the mainstream, make sure to check out the listing trend to understand where the market is headed next.
CEX vs DEX Listing Matrix Source: https://xangle.io/defi