CEX-odus: Decentralized Exchanges Going Mainstream Following FTX’s Epic Implosion

The stunning collapse of crypto giant FTX has left investors of all sizes scratching their heads and pondering: “Should I keep my funds on centralized exchanges, or look elsewhere?”

This reasonable question has led to a truly stunning uptick among DeFi protocols and decentralized exchanges (DEXs), data compiled by Dune analytics suggests.

Some protocols offering fully decentralized options have reported a near 75% increase in users following the FTX collapse, but why?

As a centralized exchange, FTX was able to mitigate business losses by secretly using customer-deposited crypto assets to cover its ever-expanding hole.

While investors believed their assets were safe, they were in reality slowly evaporating behind closed doors. Consequently, DeFi-centric platforms cannot operate in this way as they are run by auditable smart contracts rather than individuals susceptible to greed.

Corruption or mismanagement are unable to enter the equation and security is paramount. Learning their lessons, investors are realizing transparency is paramount and only DEXs are capable of delivering.

DeFi’s largest protocol MakerDAO saw a notable uptick in total value locked (TVL) following the aftermath of the FTX debacle. A week on from the collapse, MakerDAO’s TVL increased by at least a third.

MakerDAO is an Ethereum-based protocol that issues the Dai algorithmic stablecoin, which is soft-pegged to the value of the US dollar. The Maker Protocol enables users to redeem Dai in return for depositing Ethereum-based tokens as collateral.

Other top-10 protocols also attracted huge jumps in users. According to analytics compiled by Dune, the DEX seven days total volume touched over $3 billion on November 29 and was over $14 billion the week earlier.

Those figures signal consistent growth following the initial influx of investors to decentralized exchanges.

The team at Oasis.app is also reporting that its service has “had a 75% increase in the number of weekly new users for the week of, and after, the FTX fallout, compared with the 10 weeks prior.”

The Oasis.app interface integrates protocols such as MakerDAO and Aave as it can be used to borrow Dai against users’ favorite cryptocurrencies, increase exposure against them using Multiply or Earn a competitive yield — all in one place.

Oasis.app has seen a trade volume increase of over half for the month of November, skyrocketing from around $20 million in traded volume on November 6 to over $40 million just over two weeks later.

Hashflow is a decentralized exchange that allows users to instantly trade any digital asset on any chain by simply connecting their wallet. It enables users to seamlessly swap assets across chains in minutes without the need for external bridges.

The platform ensures that all quotes are executed at the price shown and that all trades are fully protected from slippage and MEV exploits, whether they happen locally or across multiple chains.

Its total monthly volume for the month of November was well over $1 billion, with over $100 million deposited on November 9 alone.

Following FTX’s spectacular collapse, the DEX market appears prime to solidify itself as a mainstream competitor to traditional centralized exchanges.

It appears that investors are sick to death of the behind-closed-doors approach to investing and are looking for an alternative option that values transparency more than anything else.

For what individuals lose in purported “user-friendliness”, they make up for in security, mitigating some of the risks associated with a situation like FTX.

That platform’s implosion has clearly been devastating for the industry and many individuals in it, however, its destruction has one clear silver lining –  the whole concept of the industry is returning to its original principle of decentralization.