Despite the market correction, interest in DeFi in China is growing. Local exchanges are experiencing difficulties as users transfer cryptoassets to DeFi protocols.
The number of searches for the word “DeFi” on the popular Chinese platform WeChat hit 900,000 on September 2, a new record high. On September 7, Chinese journalist Colin Wu reported that many local exchanges are suffering from liquidity problems due to the massive withdrawal of cryptocurrencies by customers looking to transfer assets to DeFi protocols.
Colin Wu has posted charts showing that many Chinese traders have moved their assets to decentralized exchanges (DEXs) in response to the yield farming trend – the practice of maximizing rewards for providing liquidity to DeFi protocols using high leverage solutions.
In response, he says, many exchanges have suspended withdrawals, escalating tensions and sparking a “coin withdrawal campaign”:
“On September 6, many exchanges in China began to suspend the withdrawal of crypto assets. The Chinese community has launched a ‘coin withdrawal campaign’ urging the withdrawal of all USDT and cryptocurrencies from exchanges and the deletion of accounts. ”
The journalist suggested that the proliferation of the rapidly growing DeFi tokens on Chinese exchanges is a protective measure designed to prevent capital migration to decentralized exchanges.
Cryptocurrency journalist bigmagicdao tweeted that DeFi is starting to gain traction with Chinese investors and that “a lot of people are planning to create their own projects.”
At the moment, according to DeFi Pulse, assets with a total value of $ 8.02 billion are locked in DeFi protocols, while on September 2 this figure exceeded $ 9.5 billion.Uniswap remains the largest protocol – the value of assets locked in the application reached $ 1.56 billion.
Recall that at the beginning of the month, Ethereum co-founder Vitalik Buterin compared the decentralized finance (DeFi) industry to the “printing press” of the US Federal Reserve System.
