- The average monthly volume of the on-chain derivatives market is grown 357% year over year, notwithstanding the recent downturn.
Based on DefiLlama data, weekly trading volumes for on-chain derivatives have decreased for the third week in a row, possibly indicating a lack of risk appetite among traders.
Macroeconomic uncertainties such as the outcome of the US presidential election, growing tensions in the Middle East, and the potential for no interest rate reductions by the Fed next month are some of the factors contributing to the dropping volume.
Between July 27 and August 2, the sector’s weekly trading volume hit $64.6 billion, the highest level since mid-May. Since then, though, trading volume has been steadily declining, hitting $40.4 billion last week and $62.9 billion the week after that.
Notably, the sector is on course to record its lowest weekly volume since early 2023 with just three days remaining in this week, which has only posted $5.11 billion in activity.
This week, Arbitrum (ARB) is regaining its lead in weekly volumes; around 18% of total on-chain derivatives trading occurs on the network. Hyperliquid, which makes up 17% of the volume, is right behind.
With 11.3%, 10.5%, and 8.8% of the share, respectively, Blast, dYdX, and Solana (SOL) continue to hold their leading positions in the top five largest blockchains by weekly trading volume.
Possibility of expansion
Even with on-chain traders’ decreasing risk appetite, the decentralized derivatives market is becoming more and more well-liked in 2024.
The average monthly trading volume of on-chain derivatives in 2023 was $51.4 billion in the first half of the year, up from an average volume of roughly $235 billion in the first half of this year – a 357% year-over-year increase.
The scale of the on-chain derivatives market has grown this year because to newcomers like Blast and Hyperliquid, whose trading volumes have reached $234.8 billion and $266.7 billion, respectively, year-to-date.
Still, compared to their centralized equivalents, trade activity on decentralized platforms is still minuscule.
Coinglass reports that in the last day, trading volume on Binance alone reached $46.2 billion. Only $5.1 billion in volume was recorded across the whole decentralized network of derivatives trading platforms, or about 11% of the volume traded on a single centralized exchange.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
