China has noticed a massive withdrawal of cryptocurrency from exchanges. What is the problem

Chinese Investors Are Massively Withdrawing Ethereum From Marketplaces, Deleting Accounts, And UrgingOtherusers do the same. The exchanges have already begun to counteract.

Users from China massively withdraw cryptocurrency exchanges, wrote a local journalistColin Wu in his Twitter account.He reported with reference to the analytical service Cryptoquant that the outflow of funds was recorded from the sites Binance, Poloniex, Bittrex, Kraken, Kucoin and Bitfinex.

According to Wu, in China it has become a kind of movement.cryptocurrency, delete the accounts and call for other people to take similar actions.First, over the past week, many sites have experienced delays in withdrawals and disruptions.For example, Poloniex switched off the withdrawal option three times in September due to problems with Ethereum and Tron wallets and all tokens based on them.

Another reason is the development of the sectordecentralized finance (DeFi). Wu noted that traders are withdrawing Ethereum the most. Coins are sent to DeFi platforms for “yield farming.” The essence of this strategy: make a deposit on the platform and receive interest on it in another cryptocurrency, that is, “harvest.”

Wu clarified that the impact of the withdrawal movementIt is difficult to estimate funds from exchanges, but companies have already begun to defend themselves. While users are taking Ethereum to enter the DeFi market, marketplaces are listing assets from this sector and creating similar instruments, thus trying to attract traders back. For example, Binance launched the Launchpool product on September 6. It allows customers to deposit BNB, BUSD and ARPA tokens into the pool, in order to then participate in the distribution of coins of the Bella protocol project.

The reason for the high popularity of the DeFi sectorare high interest rates on deposits. The annual profitability in the early days of launching such services is often thousands of percent, although this figure decreases over time due to the influx of users. For example, in early September, a trader at High Stakes Capital reported that he was making about $ 160 per minute from "profitable farming." However, this strategy is extremely risky. Often, DeFi platforms are launched without passing a code audit, which is why they can break on the second day of work. This is what happened with the Yam app.

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