The crypto exchanges suffer recently as the Chinese users are boosting the demand for DeFi and the yield farming protocols. The local exchanges struggle while another sell-off wiped $2 billion from the total value locked in the decentralized finance sector as we reported in our altcoin news recently.
The Chinese demand for Defi seems to be growing as the daily searches for Defi on the popular Chinese social media platform Wechat increased to a new all-time high of nearly 900,000, doubling the previous record of $500,000. The Chinese journalist Colin Wu reported that many local exchanges are suffering from liquidity issues during the wholesale withdrawal from customers that are looking to cycle funds into the Defi protocols.
Breaking: On Sep 6th, many exchanges in China experienced difficulties in withdrawing coins and shutdowns. Chinese community is launching a "coin withdrawal campaign", calling to withdraw all USDT and crypto in the exchange and delete their accounts. pic.twitter.com/JwUzRFbqXx
— Colin Wu（WuBlockchain） (@WuBlockchain) September 7, 2020
Wu posted some charts that many traders from China that bought the recent drop in the price of ETH had moved to transfer their assets to decentralized exchanges for yield farming. He reported that many crypto exchanges suffer as they suspended withdrawal services and escalated tensions by giving way to the emergence of the popular coin withdrawal campaign. He speculated that the Defi craze among Chinese exchanges is a defensive measure that aims to prevent the migration of capital onto the decentralized exchanges.
Adding to the evidence of surging local interest, the Chinese crypto reporter “Molly” tweeted that the DeFi craze has started to catch on with the local investors who have been pooling the funds in order to establish the farming fund adding that many people that plan their own projects. The record increase in WeChat searches coincided with the recent all-time high for the total value from the assets locked in Defi sector which dropped from $9.5 billion in September to more than $7.5 billion according to the Defi pulse charts. The searchers for DeFi on WeChat dropped back to 450,000 over the same timeframe.
The DeFi sector holds $8.1 billion and the Uniswap protocol is the top-ranking protocol with $1.57 billion right after there’s Aave with $1.37 billion and MakerDAO with $1.29 billion. As recently reported in our crypto news, The founder of Binance, CZ believes Decentralized finance is the future as the idea is strong, but centralized exchanges will still be popular thanks to their user-friendly features. With Decentralized Finance gaining steam, exchanges such as Binance are always co-existing with innovations such as DeFi. The founder of Binance, CZ believes DeFi is an innovative space, and investing in this space will not be a challenge for the regular exchanges.
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