LINKSWAP, a decentralized exchange (DEX) on Ethereum (ETH) has become the eighth-largest DEX by total value locked (TVL) on Dec. 14, a week after its launch. YFL, the governance token of the DEX, has also started to recover in the past week.
There are several key reasons behind the growing momentum of LINKSWAP: staking, highly-anticipated launch, the uptrend of Ethereum, and the decentralized finance (DEFI) market’s overall recovery.
20% of total YFL supply staked in Governance Vault
According to the YFLink team, over 10,000 YFL have been staked in the Governance Vault. Data from CoinGecko shows YFL has a total supply of 52,000, so approximately 20% of the entire supply is staked in the vault.
As LINKSWAP launched, a whale known as “0X_B1” donated 1,200 YFL for rewards, which are currently being farmed by stakers.
The high level of engagement in LINKSWAP’s staking pools is optimistic for two reasons. First, it shows confidence from yield farmers in the prospect of YFL. Second, it causes the supply of the token to become concentrated in the short term.
LINKSWAP launch on Ethereum was long-awaited
The launch of LINKSWAP has been delayed several times throughout November. Hence, its launch in December was highly anticipated by the users.
Although it is yet to be listed on Defipulse.com, LINKSWAP’s $20 million TVL makes it the eighth-largest behind CREAM. Considering that the DEX launched on Dec. 5, the growth in the TVL has been substantial compared to other early-stage DEXs.
Currently, despite it only being a week old, #LINKSWAP is the 8th largest DEX by TVL, right behind @CreamdotFinance and @SwerveFinance— Pepelangelo (@yflpepe) December 13, 2020
And it’s growing by millions every single day thanks to the support of large whales like @0x_b1 pic.twitter.com/hdYX6xPKEa
By Dec. 7, the combined liquidity for YFL/ETH and YFL/LINK on LINKSWAP surpassed Uniswap. By Dec. 10, LINKSWAP already achieved $10 million in TVL.
Ethereum DEX competition heating up: Uniswap, SushiSwap, Dodo, LINKSWAP
The competition in the EthDEX market is beginning to heat up. The market is currently dominated by Uniswap and SushiSwap, which handle about $233 million and $36 million in daily volume, respectively.
LINKSWAP is one of the newly-emerging DEXes alongside platforms like Dodo. The main feature of LINKSWAP is RugLock, which prevents creators of token contracts on the DEX from "rug pulling" or exit scamming.
Dodo, on the other hand, employs single-sided liquidity provision. On Uniswap, users have to deposit both sides of a trading pair to participate in a liquidity provision. On Dodo, only one is needed, which theoretically can minimize slippage.
Uniswap, SushiSwap, LINKSWAP, and Dodo all have unique standout features that make them compelling to DeFi users. For now, however, the biggest advantage of Uniswap and SushiSwap is their liquidity and their high volume, making it difficult for newcomer DEXs to compete for market share.
From #CeFi to #DeFi in one picture.— glassnode (@glassnode) December 11, 2020
The amount of fees on #Ethereum spent on $ETH deposits to centralized exchanges has fallen from ~25% in 2017 to less than 1% today.
Almost all fees spent on txs involving centralized exchanges in the past months were used for ETH withdrawals. pic.twitter.com/nvzGcwgxcC
One positive metric is that the general usage of DEXs has increased throughout the past year, based on data from Glassnode. Since October, the TVL on DEXs has risen from $20 million to $4 billion. This expands the room for competition within the DEX market in the medium to long term.