Q2'20 Review: Liquidity mining drives DeFi usage and token prices to all-time highs

By nearly every metric, Q2 proved to be DeFi’s breakout quarter. Total value locked surged to over $2 billion. DEXs saw record volumes with over $500 million in a single week as they continue to gain market share on centralized exchanges. Lending markets exploded on the back of Compound’s liquidity mining program which increased outstanding debt from ~$25 million at the start of the quarter to $800 million by the close. On top of all this activity, the native tokens of these protocols appreciated significantly as investors continue to bet on them capturing substantial earnings from protocols vying to be core parts of a decentralized financial future.

Decentralized exchanges (DEXs)

Every major sector outperformed ETH with DEXs in the lead having risen 160% since April 1st. This shouldn’t come as a major surprise as they continue to encroach on what has been the most profitable business in crypto to date. Over the past year, DEXs have comprised an increasingly larger share of total trading volume in crypto, particularly over the last few months.

This comes at a time when there are radical changes being made to the protocols affecting their performance and incentive models. The two dominant DEXs, Uniswap and Kyberhave both undergone major upgrades with two more expected in Q3.