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Ryan Watkins Profile picture
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22 Apr, 8 tweets, 3 min read
DEX volumes reached over $217 billion in Q1 2021.

This is up 236% from Q4 2020, and a whopping 8,012% from Q1 2020.

Uniswap continued to lead the way as volumes continue to rise in lockstep with asset prices.

A recap of the quarter below.

👇🏾
On a monthly basis DEX volumes reached a peak of $84 billion in February, once again led by Uniswap.
The biggest winner this quarter, and one of the more controversial DEXs, was PancakeSwap.

As BSC boomed in Q1, PancakeSwap grew its market share from to 37%.

The majority of the growth came from the middle of February onwards as Ethereum’s DeFi ecosystem fizzled out.
Now of course categorizing PancakeSwap as a DEX is generous given BSC’s centralization - in many ways it’s more like a CEX than a DEX.

So let’s zoom in on Ethereum to get a clearer picture of well... actual DeFi.
Despite narrative of competitors chipping away at its dominance Uniswap extended its lead in Q1.

It ended the quarter with just under a 60% share of the market.
Quarterly DEX volumes on Ethereum tell a similar story to the lead tweet.

In Q1 volumes reached $169 billion - up 167% since last quarter and 6,233% YoY.
DeFi had an incredible start to the year.

In our Q1 DeFi report we walk you through sector by sector, in what was one of the most jam packed quarters in DeFi’s short history.

messari.io/article/q1-202…
Our DEX section of the piece features deep dives on PancakeSwap, SushiSwap, Bancor, THORChain, as well as overviews of next-gen AMMs for Uniswap, Sushi, and Balancer.

messari.io/article/q1-202…

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Ryan Watkins Profile picture
23 Apr
In Q1 2021 stablecoins facilitated $1 trillion in transaction volume - more than the previous four quarters combined.

A thread on the incredible quarter below.

👇🏾 Image
In Q1 2021 the stablecoin monetary base reached over $65 billion and continues to rise at an accelerating pace. Image
Stablecoins continue to be adopted for a number of reasons:

✅ easy to accept as payments given all you need is a public blockchain address

✅ run on global public infrastructure that operates 24/7/365 which makes them incredibly available and reliable

niccarter.info/wp-content/upl…
Read 6 tweets
Ryan Watkins Profile picture
12 Apr
Price action will cause people to believe anything.

I don’t care how high BNB or CAKE go, it won’t change that they’re still copycats.

It’s one thing to view these assets as a way to make money, it’s another to view them as innovations that push this industry forward.

1/
The reason why BSC is faster and more scalable is not because of some magical technological innovation.

No, it’s instead the magic of centralization.

BSC is an Ethereum fork with a centralized validator set.

That’s it. Nothing more.
What Binance has done well with BSC is GTM.

Binance has incredible reach and influence and has used that to funnel a boatload of new users in DeFi.

Binance executes period. That’s why BSC is winning.
Read 8 tweets
Ryan Watkins Profile picture
11 Apr
“xyz protocol is great, but I don’t get how value accrues to xyz token”

This take sounds smart on the surface, but has now psyops many people out of the best opportunities.

Just because a token doesn’t capture fees now, doesn’t mean it won’t eventually capture value.

1/
As this view has become more popular it’s gradually begun to get abused.

Tokeneconomics are important, especially after the wave of useless utility tokens in 2017.
But that doesn’t mean that every token needs pay dividends now to be valuable.

What’s far more important is:

1) protocols are used and create value first

2) protocols have a viable path to value capture

messari.io/article/govern…
Read 4 tweets
Ryan Watkins Profile picture
6 Apr
Application specific blockchains are going to surprise people over the coming months.

Many have much better value capture and clearer paths to adoption than all the general purpose smart contracting platforms which have poor value capture and face an uphill battle vs Ethereum.
@terra_money and @THORChain are early examples of this.

Expect these two to continue gaining attention over the coming months, and expect more like them to emerge.

The smart contracting market is saturated, and there’s a ton of value being created at the base layer elsewhere.
In the future I imagine many smart contract platforms may specialize and become defacto application specific chains.

Others will ultimately function like branch offices for protocols that are headquartered on Ethereum.
Read 5 tweets
Ryan Watkins Profile picture
6 Apr
With the launch of @feiprotocol you’ve probably been hearing a lot about Protocol Controlled Value (PCV).

PCV is a powerful concept that’s core to of many of the latest decentralized stablecoins including $FEI, $OHM, $FLOAT, and $FRAX.

But what is it and why does it matter?

1/
PCV is a fairly simple idea.

It basically just means a protocol itself taking ownership of the collateral it receives when users mint new stablecoins.

This means collateral is not redeemable like it is in MakerDAO.
FEI Genesis participants just found this out the hard way.

The ETH they deposited into Fei's bonding curve is not redeemable.

They can only get their ETH back by selling FEI to the protocol on the protocol's terms (currently at a massive discount).

Read 16 tweets
Ryan Watkins Profile picture
25 Mar
Ethereum is an emerging digital economy in the early stages of a multi-decade economic boom.

The Problem?

Dollar-pegged stablecoins dominate Ethereum and the dollar is controlled by the Federal Reserve...

But what if we had stablecoins not pegged to fiat currencies at all?

1/
This is the idea at the heart of the latest wave of decentralized stablecoins.

These novel projects offer a radical opportunity for Ethereum’s monetary system to achieve stability while eliminating dependence on fiat currencies.
messari.io/article/the-ar…
It's not surprising that Ethereum has dollarized.

Many developing economies dollarize due to monetary instability.

Stablecoins allow Ethereum to overcome ETH’s volatility, which would otherwise handicap economic growth.
Read 13 tweets

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