MetaMask drops the hammer on the DeFi industry

MetaMask dives into DEX business

MetaMask is a comprehensive software for accessing Ethereum blockchain and performing various operations within the ETH ecosystem. Developed by the Ethereum dev company ConsenSys, it functions as a cryptocurrency wallet and enables users to sign in to decentralized applications via a browser plugin.

The team recently announced the launch of the proprietary decentralized exchange (DEX) aggregator to enabling users to swap tokens right within their wallet. 

The new token-swapping feature combines the liquidity from large DEX and aggregators, including 1inch Airswap, Kyber, 0x API, Uniswap, dex.ag, and Paraswap. At the initial stage, it will be available only for Firefox users. However, the team plans to add support to other browsers and mobile app.

Commenting on the launch, Jacob Cantele, product lead at MetaMask, said: 

"We believe bringing greater transparency and efficiency to DeFi on Ethereum will result in a better network experience for all."

What does it mean for the industry?

However, up to now, Ethereum users had to go to register with a decentralized exchange and pay additional gas fees to swap their tokens. Having the token swap feature integrated into Metamask should improve user experience and reduce their transaction costs significantly.

While the new service offers the same functionality as the existing DEX aggregators, however many users will find it more convenient to access those aggregators directly from Metamask.  

Earlier this month, Metamask active users exceeded 1 million, from just 264,000 in May 2019. The exponential growth might have been triggered by the mobile app's launch in September 2019 and the booming popularity of the decentralized organizations (DAOs), Web3-games, and decentralized finance (DeFi) industry.

MetaMask monthly active users

Source: MetaMask

"MetaMask user growth happens in a compounding feedback loop similar to the feedback loop of the internet itself. Users onboard to use one site, and end up discovering hundreds of other sites from decentralized finance to gaming to new communities," the team wrote.

Considering the exponential growth of Metamask adoption, the DEX and DeFi industries, as well as the centralized exchanges, may take a hit. 

First, the new feature cuts out one step from traders' routine as many users will prefer to swap their tokens right within the wallet as it is faster, and they don't have to register with the third-party. 

Second, being able to swap ETH for USDT and use it to buy any ERC-20 token, users might opt for trading via MetaMask with low or zero fees.

Skyrocketing gas prices or the fees paid by the Ethereum network users is a real issue both for the ETH-based projects and customers as they were making small transactions economically inviable. As the FXStreed previously reported, high commissions force many projects to shut down or migrate to other blockchains. 

The Metamask token swap feature may become a game-changer that will carve up the territory of the decentralized finance industry.