This One Graph Shows Ether Going From CeFi to DeFi: Glassnode

Data indicates DeFi could take a huge bite out of CeFi when it comes to the ether cryptocurrency.

Dec 11, 2020 at 5:29 p.m. UTC
Updated Sep 14, 2021 at 10:42 a.m. UTC

Data from blockchain analysis firm Glassnode indicates that decentralized finance (DeFi) may be taking a huge bite out of centralized finance (CeFi) when it comes to ether.

  • The amount of fees on Ethereum spent on ether deposits to centralized exchanges has fallen to less than 1%, as of Dec. 9, 2020, from around 26% in late October 2017, according to Glassnode data.
  • For most of 2020, almost all fees spent on transactions involving centralized exchanges (CEXs) were used for ether withdrawals.
  • The dominance of fees on Ethereum spent on transactions on CEXs in total also has dropped sharply in 2020.
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The amount of fees on Ethereum spent on ether deposits to centralized exchanges dropped sharply.

Or as Glassnode tweeted earlier today on the data put it:

  • DeFi has been grabbing the headlines since the summer as many investors and traders have been turning to these semi-autonomous exchanges and lenders, mostly built on the Ethereum blockchain.
  • At the time of writing, there is approximately $14.18 billion in total value locked in DeFi, according to popular data analytics site DeFi Pulse, a significant jump from around $662 million in the beginning of the year.
  • Maker, WBTC, Compound and Aave are currently the top DeFi protocols by total collateral locked; all are based on the Ethereum blockchain.
  • CEXs, including some of the biggest players in the space, have also been rolling out news business initiatives with DeFi features.
  • In an interview with CoinDesk previously, Chief Executive Changpeng Zhao of the biggest crypto exchange by daily spot trading volumes, Binance, said he fully expects DeFi to one day cannibalize his CEX business.

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