• Uniswap V3 saw a 208% jump in liquidity in Q1 as Coinbase and Binance saw declines of -6.35% and -13.4%.
• Bitcoin dominance rose to over 45%, Ethereum continuing its dominance in the DeFi space and Tether accounting for over 60% of stablecoin transactions in the quarter.
• Regulatory pressure from events such as depeg of USDC, collapse of Silicon Valley Bank, enforcement action from NYDFS, lawsuits from CFTC affected liquidity on CEX platforms.

Uniswap V3’s Surge in Liquidity

Uniswap V3 recorded a significant boost in liquidity during the first three months of 2023, compared to major centralised exchange (CEX) platforms Binance and Coinbase. Uniswap’s liquidity grew 208% while Binance and Coinbase declined 6.35% and 13.4%, respectively, amid regulatory pressures resulting from enforcement actions, lawsuits, settlements involving crypto exchanges.

Bitcoin Dominance & Ethereum’s DeFi Dominance

The report also highlighted Bitcoin dominance rising to above 45%, Ethereum continuing its dominance in the Decentralized Finance (DeFi) space with Total Value Locked (TVL) rising 52% to $76.8bn and market share increasing to 72%. Moreover, Tether (USDT) accounted for over 60% of stablecoin transactions during the quarter.

Regulatory Pressure Events

The first quarter was heavily impacted by various regulatory pressure events such as the depeg of USDC which sucked liquidity from centralised exchanges; collapse of Silicon Valley Bank; enforcement action taken by New York Department Financial Services against Coinbase; lawsuit brought forth by U.S Commodity Futures Trading Commission against Binance; other landmark regulatory events involving Gemini, Kraken, KuCoin & CoinEx caused further market uncertainty across the board.

Impact on Centralised Exchanges

The impact of these regulatory pressure events was reflected mostly on reduced liquidity for world’s largest CEX platforms such as Coinbase & Binance leading them to decline 6.35% and 13.4%, respectively during this quarter as compared to Uniswap’s surge with 208%.

CCData Market Outlook Report 2023 Q2

Get the inside scoop on 2023 Q2 with our Outlook Report on macro trends, inflation & digital assets here: https://ccdata-io/outlook-reports/.