Terminal week, Cathay'southward heavy-handed crackdown on crypto trading briefly sent shockwaves across the market as Bitcoin (BTC) and altcoin prices saw a sharp drop post-obit the proclamation, but as is the case with all things crypto-related, the market bounced back as resilient traders institute other means to participate in the market.

Part of China's goal in limiting citizens' power to merchandise cryptocurrency seems focused on discouraging the use of cryptocurrencies and the growing decentralized finance (DeFi) ecosystem, merely these maneuvers appear to be having the opposite upshot, as the token price and protocol activity for projects like Uniswap and dYdX have seen an uptick since the crackdown began.

According to information from Chainalysis, there has been a meaning corporeality of regional Bitcoin flows happening inside eastern Asia, as highlighted by the tall orange bar in the graph below. This suggests that crypto holders in the region have been shifting around their holdings in response to the regulatory crackdown.

Regional BTC flows. Source: Chainalysis

As stated by Chainalysis, "Assets typically flow within a region, likely due to preferences for local exchanges, simply flows between regions oft occur equally a result of regulatory concerns, geopolitical changes, or meaning market price variations."

The lack of flows out of East asia, combined with crypto exchanges like Huobi and Binance suspending services for Chinese residents, suggests that funds are being kept within the region — but non on centralized exchanges.

Related: Derivatives DEX dYdX beats out Coinbase's spot markets by volume amid China FUD

Gains in the DeFi ecosystem

At the same fourth dimension that this increased movement within the Eastern asia region was occurring, action on decentralized exchanges like Uniswap and the decentralized derivatives commutation dYdX has been on the rising as traders in China seek out a safe haven for their crypto activities.

Uniswap trading volume vs. total revenue. Source: Token Concluding

DYdX is a particularly helpful information signal, as it is now the most widely used decentralized derivatives substitution and has seen a fasten in demand since regulators from around the globe dropped the hammer on centralized exchanges with loose Know Your Client policies that offering derivatives services.

Co-ordinate to data from Token Terminal, dYdX is in the tiptop five ranking for numerous categories over the past week, including the increase in DYDX token price, total protocol revenue, fees paid, the toll-to-sales ratio and the price-to-earnings ratio. The substitution also rose to the top six in terms of increases in total value locked.

Total revenue vs. full value locked on dYdX. Source: Token Concluding

A closer look at the available information as well shows that layer-2 protocols and layer-one Ethereum competitors have too seen some of the biggest gains over the past week, led by Avalanche-based protocols like Trader Joe and Pangolin, as well as the Fantom network.

In a higher place all else, what the recent information shows is that the decentralized finance ecosystem is performing equally information technology was originally intended by providing an uncensorable way for crypto holders to transact outside of the control and purview of governments and financial regulators.

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