China’s renewed heavy pressure on cryptocurrencies appears to have the effect of boosting decentralized finance (DeFi) and decentralized exchanges.
As it is known, China recently rocked the market with the announcement of a general ban on all crypto transactions and mining. Alongside its impact on Bitcoin and other major coins, current market data shows that the perpetual contract on the Ethereum blockchain has reached an all-time high.
The Perpetual swap volume metric tracks four DeFi protocols on Ethereum, including dYdX StarkWare, dYdX Layer 1, Perpetual protocol, and Futureswap. The total locked value in these protocols has reached an all-time high of $2.8 billion.
This data was first shared by Colin Wu, a prominent cryptocurrency journalist from China. Wu attributes this to the fact that centralized exchanges such as Huobi and TP have stopped support services for Chinese users. Also, according to Wu, China’s strong regulatory policy could benefit DeFi applications such as MetaMask and dYdX developed by Consensys.
“Huobi, TP etc. exchanges have stopped support services for Chinese users. Although it is more of a statement than an action, many people still transfer their coins to MetaMask and DEX”
The management token of dYdX, a relatively new decentralized exchange with a mission to create open, secure and powerful financial products, has seen a price spike recently. In the past seven days, the token has experienced a 26.5% change in price. It is currently trading at $17.99, up 36.69% in the last 24 hours.
Similarly, Perpetual Protocol, a decentralized perpetual contract protocol, also rose following the Chinese push. It is up 23.88% in the last 24 hours and is currently trading at around $15.07.
The common feature of these platforms is that they offer perpetual swap contracts. “Perpetual” refers to a synthetic asset that has no expiration date, unlike a futures contract that is closed on a specific date.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.