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Tuesday, March 2, 2021

Exchange Tokens Catch A Boost Amidst DeFi Vs. CeFi Tussle

According to the latest sources, exchange tokens are making the most out of the DeFi vs. CeFi’s fight to the top. Analysts say another reason responsible for the boost in exchange tokens is the fresh inflow and the recent high yields recorded by the market.

The crypto market is currently in a bull season and the reason is the fresh inflow of retail and institutional investors that have taken over the leading cryptocurrencies like Ethereum and Bitcoin. Others in the path of a massive surge are freshly established projects like AAVE and SNX (Synthetix).

Exchange Tokens See Boost With CeFi Resurgence

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Analysts claim that along with these, another overlooked section is that of the exchange tokens that have witnessed a major boom during this time of fresh investor inflow. Especially in the two months of 2021, these tokens have caught the eye of many with their ever-increasing TV (Trading Volume). Sources explain that an increasing trading volume means a bigger pool of fees that can be collected for the settlement of these native tokens. Moreover, these native exchange tokens are also used for buybacks and new listings.

On the other hand, DeFi users have realized lately that the high gas fees and long hours of transactions are a major drawback. Therefore, DeFi users that surged approximately 3000% during 2020 are currently shifting back to CeFi or Centralized Finance platforms. This has led to the resurgence of CeFi and its related native exchange tokens.

There has been some major development in the CeFi corner as well. More and more users are drawn to CeFi platforms for exchange purposes because of their new features like yield farming, staking and collateralization. These features help institutional investors in their venture of holding investments. With the onset of these new features, DeFi platforms have been forced to take a back seat and the ones to benefit from it are exchange tokens.

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