Uniswap, the largest decentralized exchange on the Ethereum blockchain, exceeded $ 3 billion in deposited capital yesterday. On Uniswap, the assets are in so-called liquidity pools, which in the end make trading possible in the first place. The liquidity providers, i.e. those who make the liquidity available, receive a share of the trading fees.
Uniswap is the largest decentralized exchange
Uniswap handled about $ 2 billion in trade yesterday. It is unclear whether it was a breakdown or something to do with yesterday’s hack from Harvest (FARM). The daily trading volume is currently „only“ around USD 400 million. The deposited capital has also decreased somewhat and is currently just under USD 3 billion.
The number of trading pairs here has risen to almost 20,000, doubling in just a few weeks. Of course, many tokens are also listed here without any use or actual value.
This now brings in over $ half a million per day in fees going to liquidity providers. Soon the UNI holders can decide how high the trading fees should be.
UNI token under pressure
However, the price of the UNI token has fallen significantly from the high of $ 8 to now $ 2.70. Nevertheless, the token could get momentum again as soon as the new version of Uniswap is released. An exact date is still pending.
Accordingly, it could be that the bottom for the UNI token has already been reached at around USD 2.50. The Uniswap token is a governance token in order to have a say in the future development of the platform.
Due to its decentralized nature, all regulatory requirements, in particular under the Securities Act 1933, cannot apply. Uniswap is based on several smart contracts and an open source code. Thus there is no person responsible who could prevent trading on the platform.
Part of this astonishing increase may well be due to it, especially since Uniswap was still a small dApp at the beginning of the year. At that time there was hardly any liquidity and almost no one traded on the platform.
Uniswap gets even better with V3
Uniswap now overshadows many large centralized exchanges. Last month, the platform outperformed Coinbase in terms of daily trading volume.
Anyone can add any trading pair on Uniswap. In addition, handling is child’s play and easy to understand, even for beginners. The platform lives from the community and this is clearly demonstrated by the network effect.
That basically makes this the Wikipedia of the exchanges. But there is an important advantage here over Wikipedia – there are no admins. Everyone is on their own here, as we already know from Bitcoin. Nobody can block or censor anything. Anyone can trade freely on Uniswap without providing personal information.
We are excited to see how things will continue and when the new Uniswap update will be released. Stay tuned.
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