Options Trader Exodus From Huobi to DyDx Exchange + WOO
Following their government’s crackdown on cryptocurrencies, Chinese investors have rushed to decentralized exchanges as an alternative. The dYdX decentralized exchange has been reaping the benefits of this movement, seeing a surge of 163% in trading volume in the past 24 hours alone. Boasting more privacy and virtually no KYC (know your customer) rules, decentralized exchanges like dYdX operate without intermediaries (& regulatory oversight) and are becoming more attractive to traders and investors looking for increased security. And it wasn’t just the exchange that did well for itself, dYdX’s native token DYDX surged by nearly 80% and hit a fresh high of $26.50, a long shot from its price of $13 last week.
In tandem with the crypto crackdown, two of the largest centralized exchanges previously operating in China, Huobi and Binance, announced shutdowns and suspensions. In a press release, Huobi announced that “Huobi Global will gradually retire existing Mainland China user accounts by 24:00 (UTC+8) on Dec 31, 2021”. Shortly thereafter, Binance followed suit by suspending new registrations from China.
Another beneficiary in the shift from centralized to decentralized exchanges is the WOO Network, whose token (WOO) has managed to record a trading volume of $92,594,915 in just over 24 hours accompanied by a 36.3% increase in its price. The coin has hit multiple all-time highs over the past few days, largely attributed to WOO’s parent company Kronos being the liquidity provider for dYdX.
Let us take a second to answer the question, what is a liquidity pool in crypto? Simply put, they are collections of tokens that are locked into a smart contract. Their providers earn fees from transactions made on the DeFi platform they offer liquidity on. They are primarily used to facilitate decentralized trading and lending. Most Ethereum-based DEX’s implement liquidity pools as the back-end infrastructure for users to trade against, providing ample liquidity for trading.
Despite the fact that DEX platforms are known to be more expensive than centralized exchanges as they have higher gas fees, they offer a solution to government crackdowns like that of China.
The co-founder of decentralized exchange zkLink Vince Yang commented on the exodus from centralized to decentralized exchanges by saying, “the capital that has been stored in centralized exchanges [in China] in the past will be moved on-chain to decentralized wallet(s)”.
Other major beneficiaries of the pullback in prices were institutional players who cashed in on the FUD crash.
For more details on Woo network, liquidity pools, and this unique investment opportunity, check out the video below.
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