Decentralized margin trading exchange dYdX has seen loan originations spike in recent months as traders borrowed digital assets to exploit volatile market conditions.

The San Francisco-based project said Saturday it had lent more than a billion dollars worth of loans over the past 12 months. Until January, monthly volumes had been below $100 million, but a sudden spike in February and March, which together accounted for approximately $700 million, took dYdX’s 12-month volumes up past the billion-dollar threshold.

dYdX is an Ethereum-based decentralized lending protocol backed by Andreesen Horowitz, Polychain Capital and Coinbase founder Brian Armstrong that allows users to lend, borrow and trade ether, dai, and USDC at up to four times (4x) leverage. Users can borrow at 1.25x the collateral value that is held in a smart contract, rather than by the exchange itself.

Data supplied by dYdX shows total trading volumes also rose from approximately $4 million to $20 million in the final part of 2019. Increasing activity then saw volumes surge above $150 million in February and further up to $202 million by March.

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Founder Antonio Juliano told CoinDesk traders flocked to the exchange to use its margin trading facility when crypto volatility surged upwards because of the growing coronavirus pandemic. “People like to trade (and especially trade with leverage) when there is volatility,” he said via email.

dYdX’s head of operations, Zhuoxun Yin, explained that borrowing increased with volatility because traders maximized exposure to fast-changing market climes. “February and March saw much more volatility in crypto markets relative to recent months so we saw a corresponding increase in both borrowing and trading volume on dYdX – both were record months for us,” he said, also in an email.

30-day volatility for ETH shot up in mid-March Source: Coin Metrics

While volatility in some traditional asset classes, such as oil, have actually exceeded cryptocurrencies, the market turmoil created by the coronavirus outbreak nonetheless created a spike in activity on decentralized finance (DeFi) platforms.

Decentralized exchange Uniswap said its all-time high for volumes practically doubled in mid-March as traders jumped to take advantage of crazy price swings. dYdX was forced to keep changing its fee structures to deal with a considerable order backlog.

Although Juliano admitted that dYdX trading volumes and new loan originations had already started to tail off as volatility levels have dipped, he said they were still way above where they were in January.