Decentralized exchanges (DEXs) have undergone significant technological advancements as the market has matured over the last few years. Numerous innovations allowed traders and liquidity providers to minimize the detrimental impact of slippage and impermanent losses. Simultaneously, the issue of fragmented liquidity was tackled by smart routing solutions.
However, the innovations have not yet helped the market segment reach pre-Terra levels of user engagement. In the new “DEXscape: Scaling, Innovating, Aggregating” report, Cointelegraph Research delves into the trends currently shaping the DEX industry and critically assesses its future.
From innovations in automated market maker (AMM) mechanisms and competition among blockchains to the impact of zero-knowledge proofs and smart routing, the report uncovers what solutions can potentially revolutionize the industry while benefiting the trading experience of digital nomads.
Access the full version of the report on Cointelegraph Research for free
Notably, the 24-hour liquidity turnover ratio (LTR), i.e., the ratio of trading volume to the total value locked, was assessed for some of the most popular DEXs utilizing various AMM mechanisms. In decentralized exchanges, LTR serves as the key metric for capital efficiency, thus allowing the partial assessment of the protocol’s performance.
Out of the leading protocols, Dodo and Perpetual Protocol, utilizing proactive market maker and virtual automated market maker mechanisms, respectively, have exhibited the highest LTR, suggesting increased activity compared to DEXs with alternative mechanisms.
Nevertheless, traditional DEXs still face the issue of fragmented liquidity. This is tackled by the cohort of aggregators that unify various DEXs and liquidity pools through a number of technologies discussed in the report.
Furthermore, the growing popularity of aggregators is undeniable, with over 20% of decentralized trading volume being processed by them.
The newest Cointelegraph Research report offers a more in-depth overview of the latest innovations and trends in the DEX market. The report was compiled in collaboration with Native Labs, Helix Markets, QuickSwap and Velvet Capital, each contributing to the DEX space with breakthrough solutions.
The Cointelegraph Research team
Cointelegraph’s Research division is staffed by some of the premier minds in the blockchain sector, blending academic thoroughness with the insights gained from practical experience. The team is dedicated to delivering content that is not only accurate but also rich in insight, representing the highest standard of information available in the industry.
With decades of combined experience in traditional finance, business, engineering, technology, and research, the Cointelegraph Research team is perfectly positioned to put its combined talents to proper use with the latest Investor Insights Report.
Access the full version of the report on Cointelegraph Research for free
The opinions expressed in this article are for general informational purposes only. They are not intended to provide specific advice or recommendations for any individual or on any particular security or investment product.
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