What is (was?) FTX?

FTX is a centralised exchange (CEX). You can imagine a CEX to be similar to a stock exchange. Any crypto native will tell you that centralised = bad and exchanges are no exception; that has never been more clear than now.

The solution to the CEX problem is a simple one. Use a decentralised exchange (DEX) instead and take custody of your own funds. This does come with its own risks of course however in my opinion those risk vastly out weigh that of the risks that come with using a CEX.

This dashboard will evaluate and compare three DEXs across multiple chains in order to see how the collapse of FTX has effected DEXs and how they are utilised. The Dexs being analysed are - Curve (Ethereum), Sushiswap (Arbitrum) Uniswap-v2 (Ethereum).

In order to analyse the data it’s best to first define some dates.

For the sake of this dashboard 01/11/2022 - 05/11/2022 (pre-FTX collapse). 06/11/2022 - 10/11/2022 (FTX collapse). 11/11/2022 - 15/11/2022 (post-FTX collapse)

BEFORE

DURING

AFTER

DURING

AFTER

BEFORE

BEFORE

DURING

AFTER

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Questions.

• How have the number of DEX users changed? Are there more unique users?
• Have the number of swaps changed?
• Has the volume (in USD) changed?

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The Collapse of FTX clearly caused a spike in users, transactions and volume. During the FTX collapse the market where, understandably, highly volatile. This volatility would have lead people to engage with DEXs for multiple reasons. Some people will be trying to sell assets as fast as possible in order to minimise their losses during the down turn. Other brave souls would have been attempting to trade the turmoil using the age old method of ‘buying the dip’. All of this activity is clearly reflected in the charts. The volume in USD however saw a much larger up-tic than transactions and unique users.

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Stablecoin Volume

The amount of swap by pool didn’t see too much change during the downfall, however, the volume of the pools in USD value tells an entirely different story. The volume of the stablecoin 3-pool (DAI-USDC-USDT) saw an extremely large increase in volume. During and after the crash the demand for stables clearly increased. This sudden increase could have effected the ‘pegs’ of the stable coins allowing arbitragers to step in and profit in the madness.

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Alt-coin Season?

Similar to Curve the transactions by pool so little to no change (slight fluctuation are normal and expected). But once again the volume in USD tells the more interesting story. Since the crash alt-coins see a massive decline in volume. A clear display that people are less willing to trade and swap potentially riskier and less liquid tokens due to fear of contagion.

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Digital Gold

The Uniswap data is some of the more interesting. It shows the USD volume of PAXG-WETH pool exploding. Perhaps people are running to something considered to be a more stable asset, Gold, or digital gold at the very least (sorry Bitcoin maxis, I’m not talking about you).

Conclusion

Decentralised exchanges offer several benefits over centralised exchanges. One of the main benefits of DEXs is that they are decentralized, meaning they do not rely on a central authority or intermediary to facilitate transactions. This makes them more resistant to censorship and tampering, and allows users to retain control over their funds and data. Additionally, DEXs offer more privacy than CEXs, since they do not require users to go through a registration process or provide personal information. Overall, DEXs offer a more secure, private, and cost-effective alternative to CEXs for trading cryptocurrencies.

It is clear from the data that the collapse of FTX drove users to use decentralised exchanges. The reasons for using DEXs rather than CEXs such as FTX is now clearer than ever.

The collapse of FTX didn’t drive a massive influx of unique users to DEXs, it did however alter the way in witch people interacted with them as can be seen in the change in USD volume on the different pools.