BTC $42721.45 (-4.6%)
ETH $2938.59 (-6.4%)
USDT $1.00 (0.00%)
BCH $516.31 (-6.4%)
BSV $136.05 (-6.8%)
LTC $153.85 (-6.7%)
BNB $356.68 (-6.5%)
ADA $2.28 (-1.1%)
DOGE $0.21 (-6.9%)
BTC $42721.45 (-4.6%)
ETH $2938.59 (-6.4%)
USDT $1.00 (0.00%)
BCH $516.31 (-6.4%)
BSV $136.05 (-6.8%)
LTC $153.85 (-6.7%)
BNB $356.68 (-6.5%)
ADA $2.28 (-1.1%)
DOGE $0.21 (-6.9%)

Report: Majority of Decentralized Exchanges (DEX) Unsafe

Report: Majority of Decentralized Exchanges (DEX) Unsafe
  • 92% of decentralized exchanges (DEX) are unsafe.
  • Cer Live assessed 25 decentralized exchanges.
  • Uniswap and Syntetyx received a high-security score.
  • There has been a steady decline in DEX trading volume since August.

The latest report from Cer Live, a cryptocurrency exchange ranking platform, indicated that most decentralized exchanges (DEX) are scored poorly in terms of cybersecurity. They are also declining in trading volume since August.

Security score of 25 DEXs

Analysts have developed a methodology for assessing these decentralized exchanges (DEX) to protect traders from trading on unsafe crypto exchanges. In the assessment, CER allocated a score ranging from 1 to 10 based on overall security. However, out of the 25 analyzed exchanges, only Uniswap and Syntetyx received a high-security score.

DEX Security Scores (Source: Cer Live)
DEX Security Scores (Source: Cer Live)

CER’s report estimated that 92% of the top 25 DEXs need to have a solid focus on security. Moreover, CER asserted that six platforms failed to pass. In addition, the report warned that unaudited exchanges are considered unsafe.

A steady decline in DEX trading volume

Decentralized Finance (DeFi) has shown fantastic growth in the last few months. Consequently, the aggregate trading volume on decentralized exchanges skyrocketed to over 20 billion in September.

However, the recent hack of Harvest Finance saw volumes spike across DEX for one day, especially Curve and Uniswap. Meanwhile, the hack struck the daily DEX volume to just over $5 billion for the day. Since then, the volume seems to be on a steady decline.

DEX Monthly Volume by Projects (Source: DuneAnalytics)
DEX Monthly Volume by Projects (Source: DuneAnalytics)

Moreover, in the second half of October, DEXs saw the worst week in terms of trading volume since August. Furthermore, weekly volume dropped from the $8 billion records in the first week of September to roughly $291 million. Uniswap is still leading the pack with a 51.34% market share of all DEX trading volume.

Despite the major correction viewed across DeFi assets and reduced trading volume, the total value locked has remained near record highs. According to data from DeFi Pulse, the total value locked is presently at $11.2 billion.

With the growing popularity of DEX in recent months, it became necessary to assess the factors that contribute to their popularity and the methodology for compiling their security rating.

A decentralized exchange (DEX) is a cryptocurrency exchange that works without a central authority. In order to ensure security, decentralized exchanges need to undergo smart contract security audits after every software update, and also have a bug bounty program.

Crypto trading has enticed Ananthi Reeta to write for CoinQuora. She consistently contributes news and feature articles. She has covered several different blockchain and crypto niches, especially altcoins.