The total value locked (TVL) in DeFi has surpassed countries’ GDPs with more than $52 billion invested.
Infrastructure layer-1 blockchains are the body of this system, sustaining this value. Meanwhile, decentralized exchanges (DEX) are the hearts that keep the body alive, connecting every asset and protocol.
Essentially, a DEX allows cryptocurrency investors to trade tokens of its ecosystem in a decentralized manner. There are single-chain and multi-chain decentralized exchanges built under each infrastructure’s rules.
In particular, three decentralized exchange protocols shine amid their competitors: Uniswap (UNI), PancakeSwap (CAKE), and Orca (ORCA). Finbold retrieved data from DefiLlama on December 21 that justify these picks for 2024.
Leading decentralized exchange: Uniswap (UNI)
Uniswap is the leading decentralized exchange and one of the most solid protocols in this category. It was initially built on Ethereum (ETH) but now already supports 12 chains with a $4.06 billion TVL.
Interestingly, its total value locked surged by 69% in the last 24 hours, for a similar increase in the week. With a current $5.98 per token price, UNI’s market cap is almost the same as its TVL, indicating a balanced valuation.
PancakeSwap (CAKE)
PancakeSwap has the third-largest TVL of $1.50 billion and is the heart of BNB Chain (BNB). The DEX achieved huge success in 2021 during the play-to-earn game Mania as a core launchpad for these projects.
Currently, Pancake has kept its high ranks by expanding support to 8 other chains. Its token, CAKE, is trading at $2.48 and has less than half its total value locked in capitalization. Therefore, the 0.45 MCap/TVL ratio suggests an asymmetry and an interesting buying opportunity.
Orca (ORCA), a promising decentralized exchange
In the meantime, Orca earned its position in this list due to the huge success of Solana’s (SOL) DeFi ecosystem. This decentralized exchange is a Solana-only DEX and has seen an increase of 169% in its TVL. ORCA sits in the 10th position by total value locked, with $179.13 million worth of Solana-based tokens invested in its liquidity pools.
Nevertheless, the token shows signals of being currently overbought, with a market cap two times higher than its TVL. ORCA is trading at $8.47 by press time, up 1,870% year-to-date (YTD). Still, it is a decentralized exchange token worth watching for 2024.
All things considered, decentralized exchanges depend highly on the infrastructures they support. As long as there is a crescent trading volume and demand for DeFi, these protocols are expected to grow together.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
