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DeFi trading volumes soared in September, but overall volume decreased

2020.10.13 Robbie Liu

A summary of the OKEx Market Microstructure Report for September 2020

In September, the price of Bitcoin (BTC) was heavily influenced by the macroeconomic climate — falling alongside the United States stock market and the price of gold. It posted its largest monthly drop (7.57%) since March, as per the OKEx BTC Index price. 

The decrease in BTC's price during the month of September corresponds to a slide in OKEx's trading volume. Spot volume decreased by 15% when compared to the previous month. Additionally, futures volume was down 27% from August. However, the USDT-margined swap market saw large increases following the listings of various decentralized finance tokens — which resulted in a 3% increase in the total swap volume. 

The futures market had the most trading volume in September 2020
The futures market had the most trading volume in September 2020. Source: OKEx

Overall, bid/ask spreads displayed slightly higher levels (in terms of mean and variance), due to the extreme volatility at the beginning of September. Execution speed, on the other hand, improved. 

The average execution speed of the top 10 coin-margined futures formed "shot groups" in September 2020
The average execution speed of the top 10 coin-margined futures formed "shot groups" in September 2020. Source: OKEx

In this month's summary of the monthly OKEx Market Microstructure Report, OKEx Insights will take a look at trading volumes and trends across the spot, futures and swap markets on OKEx throughout September 2020. 

DeFi trading volume increased significantly in September

In September, the spot market accounted for 480 pairs — 51 more than in August. The total spot trading volume ended at $45 billion, which is a decrease of 15% from August. In particular, BTC spot trading volume slid 19% and its average daily volume fell to $432 million. 

September's average ask spread was slightly higher than August’s average. For example, the ask spread when trading $100,000 worth of BTC at the spot price was recorded at 0.0254%, compared to August's 0.0216%. This was largely due to the huge volatility on Sept. 3, when Bitcoin price plummeted 10.73%.

TRON (TRX) and Polkadot (DOT) replaced Litecoin (LTC) and Chainlink (LINK) on the list of the month's top altcoins. TRX jumped to third place in spot volume following its efforts in the decentralized finance market and the launch of several yield-farming projects. 

Additionally, OKB is in high demand, thanks to new OKEx Jumpstart projects and the rollout of a user-friendly yield-mining page, Earn

The "Major 6" and top altcoins of the month by spot trading volume were:

  1. Bitcoin (BTC)
  2. Ether (ETH)
  3. TRON (TRX)
  4. Polkadot (DOT)
  5. OKB
  6. Bitcoin Cash (BCH)
  7. EOS
  8. Bitcoin SV (BSV)
  9. NEO
The average daily volumes were higher at the beginning of September
The average daily volumes were higher at the beginning of September. Source: OKEx

By the end of September, OKEx had added a total of 50 DeFi tokens to the decentralized finance section of the website. 

Interest in decentralized finance exploded in September, which was also reflected in the trading volume of DeFi tokens on OKEx. While the overall spot market volume was down, the DeFi spot volume rose 9% in September. Its share of the total spot trading market rose from 19% to 25%. 

OKEx went live at the end of September with a total of eight coin-margined swaps and 27 USDT-margined swaps for DeFi tokens. These listings also led to a significant increase in volume, as swap trading volume for DeFi tokens doubled in September. Its share of the overall swap trading volume increased from 7% in August to 13%. 

DeFi trading accounted for 25% of the total spot market in September 2020
DeFi trading accounted for 25% of the total spot market in September 2020. Source: OKEx

The complete dataset for OKEx's DeFi Market Microstructure Report for September can be downloaded here.

BTC price stagnation caused futures volume to drop

Futures, the most traded product on OKEx, saw volumes drop by 27% in September — falling to a total of $89 billion. The drop is mainly due to stagnation in the price of BTC and the declining attractiveness of major altcoins against more interesting DeFi tokens. 

OKEx offered a total of 174 futures instruments — 20 instruments more than in August — which allowed traders to make more complex combinations and trades with different expiry dates. 

Among futures, coin-margined contracts were more popular than USDT-margined contracts. For example, the most heavily traded BTC quarterly future (BTC_USD_200925) generated a total volume of $11.76 billion — 2.25x more than the most heavily traded USDT-margined quarterly future (BTC_USDT_201225). 

The average daily volumes for futures products were highest at the beginning of the month
The average daily volumes for futures products were highest at the beginning of the month. Source: OKEx

Swap trading volume and liquidity

In September, OKEx offered a total of 94 swap instruments — 31 instruments more than in August, and 62 of which were USDT-margined. The total swap trading volume increased by 3% to $68 billion. 

While BTC's coin-margined swap is still ahead of its USDT-margined swap in terms of volume, it's a completely different story for altcoins. Uniswap (UNI), for example, saw its USDT-margined swap trading volume reach $133 million in the 13 trading days after its listing on OKEx — 5.68x more than the coin-margined swap. Moreover, the total USDT-margined swap volume of UNI ranked fifth, despite the fact that the swap went live only on Sept. 18. 

DeFi traders preferred to use USDT. We saw yearn.finance (YFI) and DFI.money (YFII) occupy the ninth and tenth places in terms of USDT-margined swap volumes. The opposite was observed with EOS, for which traders preferred the coin-margined swap. 

USDT-margined swaps were highest at the beginning of the month
USDT-margined swaps were highest at the beginning of the month. Source: OKEx

In terms of spreads, the USDT-margined BTC swap still lagged behind the coin-margined swap. The ask spread of the BTC_USDT_SWAP, when trading $300,000 worth of BTC, was 0.0284% — compared to a lower 0.0219% on the BTC_USD_SWAP

USDT-margined swaps still have tighter spreads for BTC
USDT-margined swaps still have tighter spreads for BTC. Source: OKEx

For readers interested in more details and OKEx market data from September 2020, the complete dataset used in this report can be downloaded here.


Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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