DEX trading reached new all-time high in Q3, BSC takes the lead

DEX trading on all major networks rose in Q3, led by the expansion of the Binance ecosystem in the past two months. Leading networks reached new records, while smaller chains like Sei and AVAX made robust gains over the past quarter. 

DEX activity erased all effects of the bear market, reaching an all-time peak for Q3. Solana, Ethereum, and BSC all reached peaks in DEX activity, with significant volume inflows into smaller networks, such as Avalanche and Sei. 

Q3 had smaller peaks in DEX activity and fewer periods of anomalous traffic, but a higher baseline of activity. DEX activity expanded in addition to peak competition between centralized markets, as brands competed in both centralized and Web3 activity, reported Cryptopolitan. 

DEX activity was also reflected by overall TVL in DeFi projects, returning to levels not seen since the peak of the 2021 bull market. DeFi now holds over $172B in value locked, with DEX the second-strongest growth factor after lending. 

Overall trading volumes reached $1.3T for the quarter ended in September, with 160% YoY growth. DEX activity also cleared $1T in quarterly volumes for the second quarter in a row. Compared to the 2022 bull market, DEX volumes show robust growth, while 2022 activity fell by as much as 54% on a yearly basis. 

Sei and Avalanche return as notable additions to DEX space

After an overall slowdown of Web3 activity, smaller networks like Sei and Avalanche returned to more active volumes. 

Sei achieved an all-time high in Q3, with $3.8B in total trading. Avalanche achieved an even higher expansion, with volumes at over $37B for the whole period. Avalanche showed an inflow of real volumes and activity after years of lower liquidity as the chain pivoted from gaming. 

DEX activity also expanded with the addition of futures markets, as more brands offered perp DEX trades. The shift to DEX tracked several trends, including a growing supply of stablecoins, increased liquidity, and tools for more intuitive trading. 

DEX activity increased gradually against centralized exchanges, with around 16% share at the beginning of Q3 and over 18% at the end of the period. 

PancakeSwap boosted its share of DEX trading

In the past three months, PancakeSwap increased its share of DEX trading. PancakeSwap got a boot from Binance Alpha tokens, as well as a shift to Binance ecosystem memes. PancakeSwap also expanded its activity due to trading incentives and Binance ecosystem reward programs. The DEX was also among the most successful new token launchpads with significant net returns. 

As a result, BNB Smart Chain and PancakeSwap are carrying the bulk of volumes for EVM-compatible chains, excluding Solana. Separately, Solana processed $326B in trading volumes for the past quarter, up 21% from Q2. Ethereum retained its lead with $339B in trading. Results may overlap, as PancakeSwap carries volumes from Ethereum tokens. 

DEX activity also grew through the convenience of wallets and routers, resulting in lower transaction fees. Decentralized exchanges also got improved protection against sandwich transactions and bots.