- The DeFi market is finally booming in China, but still a bit late compared to the rest of the world.
- Chinese searches for ‘DeFi’ on WeChat have nearly doubled their record.
- Meanwhile, exchanges are quickly losing liquidity as users keep withdrawing funds to engage in yield farming.
The year of 2020 may end up forever marked by a rather bad global pandemic, but in the crypto industry, it will be remembered as the year of DeFi. This is the year the DeFi sector exploded around the world, and the trend is finally getting big in China, as well.
DeFi Finally Arrives in China
Chinese users seem to be developing a strong taste for the decentralized finance sector. Daily searches for DeFi on the country’s own social media platform, WeChat, nearly doubled recently.
On September 2nd, the searches reached 900,000 within 24 hours. The previous record was almost half that — 500.000.
The number of WeChat searches for #DeFi is at record levels.
Almost 1 million unique searches on September 2. 👀 pic.twitter.com/3cndAmmGa8
— Cole Kennelly (σ, σ) (@ColeGotTweets) September 7, 2020
Not only that, but local reports also revealed yesterday that users are massively withdrawing funds from crypto exchanges in order to transfer them to DeFi protocols and earn rewards through yield farming protocols.
Breaking: On Sep 6th, many exchanges in China experienced difficulties in withdrawing coins and shutdowns. Chinese community is launching a "coin withdrawal campaign", calling to withdraw all USDT and crypto in the exchange and delete their accounts. pic.twitter.com/JwUzRFbqXx
— Wu Blockchain (@WuBlockchain) September 7, 2020
While great news for DeFi, this can be very bad for the local exchanges, as it lowers their liquidity. A local reporter, Colin Wu, noted that one example of this happened when ETH price recently dropped. ETH users quickly transferred their funds to DEXes to engage in yield farming.
The data shows that due to the popularity of yield farming, especially the recent sharp drop in the price of ETH, many users buy bottoms on exchanges and then transfer to DEX for farming. The stock of ETH and other farm crypto on the exchange is falling frantically. pic.twitter.com/I6982HMVTL
— Wu Blockchain (@WuBlockchain) September 7, 2020
Arrival to China Gives DeFi a New Boost
The situation is quite bad for the moment. So much so, that exchanges had no choice but to stop withdrawals. Wu also noted that the exchanges are rapidly adding DeFi coins as a desperate attempt to convince users to keep their funds within the platforms.
The "withdrawal movement" is widely spread, but the actual impact is uncertain. Exchanges are also starting to defend, such as crazy listing of DeFi coins to make users to gamble in the secondary market, and helping users with yield farming. pic.twitter.com/ichQNaSHtN
— Wu Blockchain (@WuBlockchain) September 7, 2020
As mentioned before, the DeFi sector seems to have been a little late with its arrival to China. However, it finally started picking up quite recently, as another local crypto reporter, Molly, recently noted.
DeFi is getting started in China now. only few WeChat groups were discuss ,farm and trade about it before. For the Past few days There are more people got into DeFi, there are even groups put money together made a “farming fund”, and many peopleare planning their own projects ..
— Molly (@bigmagicdao) September 2, 2020
Even though DeFi recently took a major hit when the new bear wave took away nearly $2 billion from its TVL, it seems that the trend is only picking up in China, and that it might be time for the surge to come back.
