Decentralized exchanges (DEXs) will shape the future of crypto’s mass adoption.
Insane yields and an unprecedented demand for Non-Fungible Tokens (NFT’s) have been been the drivers of the DEX explosion.
We believe (the right) DEXs are a safe bet, representing a vital part of the crypto ecosystem. So which ones are the gems that are screaming buys right now?
- State of the DeFi Union
- DEXs and NFTs transforming our metaverse future
- 4 DEX Gems to look out for
State of the DeFi union
DEXs hold a fundamental role in the crypto universe. They are not going anywhere.
Decentralized Finance (DeFi), being the biggest use case for DEXs and arguably crypto in general, and which enjoyed a huge boom in the 2020 DeFi summer, has suffered from a bit of a DeFi winter hangover when it didn’t really see much growth in late November.
However, the growth of the DeFi industry is now astounding and we have a great thread from Justin Hartzman showing how Total Value Locked (TVL) has jumped almost 19,000% and the user base has increased to 4.2 million users.
Let’s put that into perspective though, of the 300 million crypto users, only 1.4% of the crypto community is currently investing in DeFi. Talk about an opportunity.
That places DeFi and DEXs firmly in the early stages of the crypto revolution and offers degens an opportunity to get in now, before 20% of the crypto community are on board.
DEX’s and NFT’s transforming our metaverse future
The DEX use case has increased significantly as at the heart of the NFT craze is the need for an up and running decentralized marketplace where in-game assets can be exchanged for crypto.
Top exchanges, such as Binance and other centralized marketplaces, such as OpenSea were first movers to support the gaming ecosystem and NFT platforms such as MANA, SAND, AXS and ENJ.
DEXs are not holding back and either have signed (or are in the process of signing up) partnerships with multiple metaverse players.
Unlike many investors in DeFi, gamers are tech-savvy and the difficulties in using a Metamask wallet should not hold back the mass adoption of this technology.
The top DEX on Avalanche (AVAX), JOE has garnered huge hype. And for good reason. With a very healthy US$1.45 billion in TVL, Trader Joe is the go-to platform for DeFi or node investments on the network.
A market cap of US$221 million, marks their MCAP/TVL ratio at 0.15, ranking it 8/59 for the most undervalued DeFi protocol on Avalanche.
Down 74% from their high of US$5.02, huge gains are to be made as the new crypto cycle kicks in. Make sure you follow Sheldon’s rules and enter when the Relative Strength Index (RSI) is oversold.
Bringing liquidity to Terra tokens, anyone can set up a merchant stall by supplying liquidity in one of two pools. Then, anyone else can trade against those tokens at any time. They operate on a flexible fee structure supporting stable swap pools and constant product pools.
Astroport (ASTRO) is the first fully-equipped DEX on the Terra network with a TVL of US$826 million, and backing from none other than the mighty Delphi Digital. These guys are machines, and they’ve helped develop a powerful DEX, arguably the first of its kind in the Terra ecosystem.
For more information on how it’s set to rival Terraswap, check out our article here.
With a market cap of US$73 million, the all-important MCAP/TVL ratio sits at a healthy 0.0969.
At about US$0.667, Astroport is down 68% from its high of US$2.10 and after longing for a good short term entry price, this just might be a good time to hop on board this promising DEX.
Spooky (BOO) is the 2nd largest DEX on the Fantom network with a TVL of US$1.4 billion. It’s a favorite when it comes to the popular TOMB finance and its various forks.
The MCAP/TVL puts them in 9/42 for most undervalued DEXs with high potential.
At around US$24.06 currently, BOO is down 39% from its 90-day high, but it has reclaimed 18% from its January low. It’s been testing the US$22 support, so find a good entry position and DCA in.
Dopex (DPX) is a Decentralized Options Exchange platform on the Binance Smart Chain (BSC) network that aims to solve the nuances and intricacies that come with options writing and purchasing.
DPX uses option pools to allow anyone to earn a yield passively. This is done by selling options to purchasers with minimal interaction on the protocol. Pool participants can simply deposit base (BTC, ETH, LINK, etc) or quote (USD denominated stable coin) assets to a pool.
Sitting around US$2,200, DPX is 50% off the 90 day high of US$4,219, but has had a 61% rally from their 30 day low of US$1,237. Dollar-costing is a great way to get started with this coin, and watch the RSI to grab a bigger bag.
DEXs are the backbone of DeFi and every Layer-1 needs a good DEX. If you are looking to get into the market then your safest option is always to choose the top Layer-1s.
However, this is a degen channel and if you can stomach a little more risk, then DEXs are also a pretty safe bet. DEXs aren’t going anywhere and their use case will increase significantly as DeFi, NFTs and the Metaverse use cases grow.
Trader Joe, Astroport and Dopex could well be undervalued, and if you’re looking to add some exposure to DEX’s (as you develop a well-rounded portfolio), these could offer a good risk to reward ratio. And remember, DCAing is always a sound idea, and if you want to do it right and maximize your gains, don’t forget to watch Sheldon’s sniper masterclasses to find a good short term entry price.