Decentralized finance (DeFi)-related tokens and exchanges appear to be making a comeback after China announced its latest crackdown on crypto.
Beijing shaking an angry fist at the crypto industry is nothing new. It happens a couple of times every year, and now markets have become mature and resilient enough to shake off the FUD storm that usually follows. On Sept. 24, China’s central bank did it again, banning crypto transactions for the umpteenth time.
There was a minor dip in total market capitalization over the weekend when it fell below $2 trillion briefly, but assets are recovering to start the week and DeFi related tokens are leading the pack.
The Chinese media outlet, Wu Blockchain, has correlated the two, stating that as the regime cracks down on centralized exchanges, decentralized exchanges are seeing a surge in activity from Chinese traders.
“The market has soared in the last hour. ETH rose 9% and returned to $3,000. The actions of China’s CEX exchange triggered leading DeFi projects to lead the rise.”
DeFi token surge
Market cap is currently up 4.8% on the day according to CoinGecko, with a cash injection of more than $100 billion since the same time yesterday.
A lot of this has gone into DeFi tokens, including Ethereum which is currently trading at $3,130 after gaining more than 10% over the past 24 hours.
The leading crypto asset in the top-100 in terms of gains is DYDX which has surged 44% to hit an all-time high of $21.44 in the early hours of Sept 27. The DEX token has been driven by an increase in demand from Chinese traders on the dYdX derivatives platform according to Wu Blockchain.
As exchanges such as Huobi have now banned Chinese from registering new accounts, they are flocking to decentralized alternatives such as dYdX. However, the current momentum is being driven by liquidity farming incentives rather than trading — “The current huge transaction volume is still caused by farming, rather than real demand.”
The surge in transactions on dYdX has been large enough to overtake Coinbase’s daily volume as it tops $4 billion in volume.
Uniswap tops $25
The Uniswap DEX token, UNI, is also surging at the moment having gained 34% over the past 24 hours to top $25. This makes UNI the second-biggest gainer in the crypto top-100 at the moment.
SushiSwap’s SUSHI token is in third at the moment with a 24-hour increase of 23% to hit $11.27 according to CoinGecko. Other DeFi tokens enjoying double-digit gains include Curve Finance (CRV), Compound Finance (COMP), Aave (AAVE), and Synthetix (SNX).
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.