The recent crash of FTX sent shockwaves through the entire digital asset market, signaling its own impending collapse. Even Sam Bankman-Fried, the newly appointed CEO of the platform, expressed his agreement that this was an unprecedented show of mismanagement.
While the popular best crypto exchanges kept withering, the DeFi market maintained on tracks without any issue. It even attracted supply with desirable interest rates while facilitating non-custodial transactions.
The market even liquidated collateralized loans at the Ethereum network’s speed. A recent report has shown how Uniswap and Aave have been unaffected by the downfall of FTX. Aave offered up to 7.3% interest on Gemini’s stablecoin, GUSD, only this week.
Users first panicked as Gemini delayed product withdrawals as a result of the FTX contagion. Thus, Aave customers withdrew GUSD shares in order to borrow the asset en masse. The majority of those who borrowed believed that token hoarding was prevalent.
This resulted in a dramatic increase in lending rates, which attracted more liquidity to the platform. In other words, users had the opportunity to earn real-time rewards for holding a temporarily-risky asset.
On the other hand, the most popular DEX, Uniswap, surpassed Coinbase in terms of ETH trading volume. Users of cryptocurrencies have begun withdrawing funds from exchanges and investing them in non-custodial alternatives. It aided the market’s largest and most liquid DEX in capturing a significant amount of volume.
Besides Uniswap and Aave, general liquidity providers have also enjoyed a hike in profit with the increased volumes. For example, the USDC and WETH pools on Uniswap generated over 3.8 million dollars in fees during the previous week.
Such moves are significant indications of DeFi’s innate capacity, regardless of market conditions.