Volumes on decentralized exchanges (DEX), which rely on smart contracts instead of third parties to process user trades, grew 667%. DEX volumes for spot assets increased as much as $3.9 trillion traded over the past year, while futures volumes increased by 2,704% from $7.4 billion to $209.1 billion. Part of these trades came from layer 2-based DEXs, such as dydx and Loopring.
However, the number of active addresses interacting with the Ethereum network on a daily basis rose by just 4%. This could imply most existing activity on Ethereum came from prior users instead of new market entrants, some analysts said.
“While Ethereum ticked massive growth in the most important aspects, growth was conservative in terms of Daily Active Users which surged by a mere 4%,” said Egor Volotkovich, director at cross-chain solutions tool EVODeFi. “This does not mean users were priced out of Ethereum in Q1 as we saw no significant price surge in the cryptocurrency within this time frame.”
Volotkovich explained the lower activity could be attributed to the growing competition around the Ethereum network, such as Terra, BNB Chain, and Avalanche.
“The number of competitors is notably rising, and rather than stick to Ethereum only, investors are choosing to diversify their portfolio in order to get the best from the growing world of DeFi, NFTs, and Web 3,” he said.
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