Decentralised crypto exchange Uniswap has flipped Coinbase (COIN) to become the second-largest platform for trading ethereum after Binance, in the wake of the FTX implosion.
In the last 24 hours, Uniswap has eclipsed major centralised exchange Coinbase for ethereum (ETH-USD) trades according to data from Coingecko.
Traders are flocking to decentralised exchanges (DEXs) in the wake of FTX’s sudden, catastrophic implosion.
In the wake of the FTX crisis, bitcoin (BTC-USD) is standing at $17,042 (£14,330) as of the time of writing, up 2.6% in the past 24 hours and ethereum jumped over 1.8% in the past day to $1,270.
Check: Crypto live prices
The news of a possible mass movement to decentralised exchanges was shared on Twitter on Tuesday by the inventor of Uniswap.
Uniswap inventor Hayden Adams tweeted: “DEX starting to replace CEX? Total ETH/USD (or stables) volume:Binance: ~$1.9b, Uniswap: ~$1.1b, Coinbase: ~$0.6b.”
According to data from Coingecko, Coinbase accounts for $564,937,971 worth of ethereum trades in the last 24 hours, while Uniswap accounts for $966.17 million.
Decentralised cryptocurrency exchanges differ from centralised ones (CEXs) in that the cryptocurrencies that are traded are not held by the actual exchange, but stay within user wallets and are exchanged in a peer-to-peer way that utilises blockchain smart contracts.
One of the key arguments outlined in Satoshi Nakamoto’s Bitcoin White Paper, now over a decade old, is the need to take monetary control out of the hands of centralised authorities and create a truly peer-to-peer method of exchange.
This is why advocates of decentralisation see centralised cryptocurrency exchanges as basically the same as the legacy financial authorities that the crypto industry is attempting to replace.
Alternatively, decentralised exchanges, or DEXs, have no centralised authority and user assets stay within their own wallet and are not controlled by the exchange.
In the case of FTX.com, it has been reported by Reuters that the centralised exchange included a portion of customer deposits in loans to a related trading arm called Alameda Research.
So, since the collapse of FTX – one of the most prominent centralised cryptocurrency exchanges – crypto traders have decided to take seriously the decentralisation adage of “not your keys not your coins” and move away from storage on centralised exchanges and into crypto cold storage wallets and the use of decentralised exchanges for trading.
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