- Uniswap V3 saw a 208% increase in liquidity during the first quarter.
- Coinbase and Binance witnessed a decrease in liquidity of 6.35% and -13.4% respectively.
- The depeg of USDC and the failure of SVB had a negative impact on liquidity.
The decentralised exchange (DEX) platform Uniswap saw an exceptional growth in liquidity during the first three months of 2023, in comparison to major centralised exchange (CEX) platforms Binance and Coinbase.
The quarterly market report also revealed that Bitcoin’s market dominance rose above 45%, Ethereum continued to dominate the DeFi space, and Tether (USDT) accounted for over 60% of all stablecoin transactions.
Get the inside scoop on 2023 Q2 with our Outlook Report on macro trends, inflation & digital assets.
✔️ $BTC‘s market dominance rises to 45.2%, highest since April 2021
✔️ $ETH dominates DeFi, TVL rises 52% to $76.8bn, market share increases to 72%
✔️ Centralised exchange…
— CCData (@CCData_io) April 14, 2023
CCData: Regulatory Pressures Impacting Liquidity
The CCData market outlook report shows the influence of regulatory pressures on liquidity during the first quarter of the year, with the biggest CEXs experiencing a decrease in liquidity.
The first quarter saw numerous regulatory actions, including Coinbase settling for $100 million with the NYDFS in February and then receiving a Wells Notice from the SEC in March. Additionally, Binance was sued by the CFTC in March.
Other noteworthy regulatory pressure events in the quarter included Gemini, Kraken, KuCoin, and CoinEx, as well as the USDC briefly depegging from the US dollar, sucking liquidity from CEXs.
Uniswap V3 Surges 208% as CEX Platforms Register Declines
Comparing liquidity on Uniswap to that of Coinbase and Binance during the quarter, Uniswap V3 recorded a significant 208% rise in liquidity, while the CEXs suffered declines of 6.35% and -13.4%, respectively. According to CCData, the increase in Uniswap liquidity can be attributed to market participants trying to capitalise on the USDC depeg by pushing liquidity into ETH-USDC pools.
On-chain data also displays the 1% market depth for the top trading pairs BTC-USD and BTC-USDT falling to its lowest level for USD and USDT on 26 March, due to the collapse of Silvergate Bank, Signature Bank, and Silicon Valley Bank (SVB).
CCData researchers note that low liquidity and trading volumes had a noticeable impact on CEX reserves, with reserves dropping to their lowest level since 2020. There was a slight rise in March, but it was not enough to make up for the losses of the quarter.