The DeFi Takeover: Uniswap Has Done More Volume Than Coinbase In 2023

San Francisco-based exchange Coinbase has fallen behind decentralized exchange Uniswap in terms of trading volume since the beginning of 2023, making the DeFi exchange the premier decentralized trading spot for users. 

Trading Volumes On Uniswap And Coinbase

Taking to X (Formerly Twitter) Bitwise researcher Ryan Rasmussen revealed that Uniswap performed better than Coinbase in terms of spot trading volumes in 2023.

Uniswap’s trading volume first surpassed Coinbase’s trading volume in February, and despite the decline in trading volume since then, Uniswap still managed to be ahead of the largest crypto exchange in the United States.

Coinbase’s daily trading volume has consistently been above $1 billion since then, while Uniswap’s daily trading volume has come out above $1.4 billion for the same time period.

According to data shared, both Uniswap and Coinbase’s trading volume in Q1 of 2023 was above $100 billion respectively. However, Uniswap managed to surpass Coinbase by $10 billion in trading volume at the end of Q1 of 2023. Uniswap facilitated up to $150 billion in trading volume, while Coinbase came out at $145 billion worth of trades.

Presently, Uniswap generates more than half of the daily trading volume of all DeFi protocols put together. In terms of monthly volume, Uniswap facilitated up to $73 billion in monthly trading volume in March alone and accounted for over 60% of all DeFi trading over 7 days straight. 

In comparison, Coinbase saw a total of $49 billion in monthly trading volume for March, coming well behind Uniswap in this regard.

Uniswap and Coinbase

Side-by-side comparisons of both exchanges since 2020 | Source: X

Uniswap was also dominant in Q2 of 2023, surpassing Coinbase with close to $20 billion at the end of Q2 of 2023. At the beginning of Q2 of 2023, Uniswap saw $37 billion in monthly trading volume in April, while Coinbase saw a $34 billion trading volume in the same month.

According to CCData research analyst Jacob Joseph, the de-peg of USDC and other stablecoins was a significant factor in Uniswap’s rise in trading volume. He stated that traders turned to on-chain trading venues during the period of uncertainty.

“As the largest decentralised exchange, Uniswap was well placed to take advantage of decreased market liquidity and increased regulatory focus on centralised exchanges,” Joseph told CoinDesk back in March.

Both exchanges also experienced a downward trajectory in spot trading amid the bear market. But Coinbase experienced a larger loss than Uniswap, losing up to 83% from its $540 billion trading volume in Q4 of 2021, while Uniswap dropped by half from its $235 billion trading volume.

Decentralized Exchanges Catching Up With Centralized Exchanges

Over the years, decentralized exchanges (DEXes) and centralized exchanges (CEX) have been seen as competitors and weighed side-by-side with their pros and cons.

The first and foremost of these is security which has taken center stage. While CEXes have lost billions of dollars in several waves of attacks such as hacks, fraud, and regulatory overreach, DEXes have not been left out as over $3.3 billion have been stolen from DeFi protocols in the last few years.

Another argument has been accessibility because, so far, CEXes have proven to be easier to use than DEX due to the robust nature of DEXes. The integration of off-chain information on DEXes makes it a little difficult to grasp, especially for beginners. 

However, Uniswap surpassing Coinbase in trading volume could suggest investors are choosing the decentralized option despite the hoops they have to go through.

This could be because the interchain infrastructural improvement of DEXes gives investors the ability to trade new and novel tokens without waiting for an exchange listing.

Following the infamous DeFi summer in 2021, DEXes are becoming mainstream, offering numerous benefits such as permissionless trading, increased privacy, and lesser reliance on intermediaries, making more traders embrace these protocols for executing trades.

Nevertheless, CEXes remain suitable for users who do not want self-custody and for operators who need jurisdictional compliance, as well as the less technologically savvy who find decentralized finance (DeFi) difficult to navigate.

Crypto total market cap chart from Tradingview.com (DeFi Uniswap Coinbase)

Total market cap remains volatile | Source: Crypto Total Market Cap on Tradingview.com

Featured image from Blue Manakin, chart from Tradingview.com

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