Created and operated by the Winklevoss brothers, Gemini is one of the top cryptocurrency exchanges in the U.S.
The New York-based exchange has made a name for itself to date in serving as a user-friendly and very secure fiat-to-crypto on-ramp. Notably, though, the exchange has also been treading deeper where many of its centralized exchange peers haven’t yet: Ethereum’s decentralized finance (DeFi) ecosystem.
There’s a standing debate in the crypteconomy as to whether decentralized exchanges like Uniswap will end up totally dominating centralized exchanges like Gemini over the long run. Whatever happens along the way, the DeFi – CeFi relationship hardly needs to be zero-sum if recent developments around Gemini are any indication.
GUSD Grows in DeFi
Launched in September 2018 and issued on the Ethereum blockchain as an ERC-20 token, Gemini Dollar (GUSD) is Gemini’s native stablecoin.
For GUSD, then, the big advantage in being an Ethereum token is that the asset can be put directly into use in DeFi, which is precisely what we’ve seen happening more and more in the sector.
For example, that dynamic was on full display this week when Gemini co-founder Cameron Winklevoss highlighted how the GUSD / ETH trading pair on the decentralized exchange Uniswap had achieved its first $1 million worth of liquidity. (Note: Uniswap relies on 50/50-weighted liquidity pools, which liquidity providers (LPs) can provide liquidity to earn trading fees).
— Cameron Winklevoss (@cameron) November 18, 2020
Of course, this is still a small amount of liquidity relatively speaking. But it’s not bad for GUSD, which currently accounts for around 0.05%, or $12.8 million, of the wider stablecoin economy’s $23.8 billion market cap.
And beyond numbers, the rise of GUSD in DeFi means Gemini is notably positioning itself as a trailblazer.