Decentralized exchange platform Uniswap has hit an intriguing milestone after recording a higher 24 hour trading volume than America’s largest cryptocurrency exchange Coinbase.
Uniswap founder Hayden Adams made the observation on Twitter on Monday, highlighting Uniswap’s massive $426mln trading volume over the past 24 hours. The number was $78mln higher than Coinbase’s 24 hour trading volume of $348mln.
What is Uniswap?
Uniswap has enjoyed immense success in 2020 among a surge in interest in the Decentralized Finance space.
The platform itself is not a DeFi protocol, it’s what is known as an automated market maker, and it has established itself as one of the most used decentralized exchanges as a result of it’s liquidity provision services.
The Daily Chain has a full guide to the ins and outs of Uniswap for those wanting the nitty-gritty details of the platform. In short Uniswap is a decentralized protocol that automates the provision of liquidity on the Ethereum blockchain.
It essentially allows users to deposit various ERC-20 tokens on the platform which then forms part of liquidity pools that power the decentralized exchange. The exchange is managed by smart contracts that automatically balance liquidity across the different tokens on the exchange.
Liquidity Providers are incentivised to contribute to liquidity pools by receiving a percentage of trading fees made from the liquidity pool, and that is also proportionate to the amount of liquidity provided. Liquidity Providers receive Uniswap liquidity tokens that represent the value of your deposit to the given pool.
Uniswap is popular for its ability for users to swap any ERC-20 token for another, there are no restrictions on trading pairs that we’ve been accustomed to on centralized exchanges. The protocol will use routing to complete swaps between ERC-20 tokens.
Uniswap raises $11mln in fundraising round
Uniswap announced that it had raised $11mln in a series A fundraising round at the beginning of August, with the proceeds earmarked to fund development of a version 3.0 of the decentralized exchange.
According to data from DeFiPulse over 1.23 million ETH is locked into the decentralized exchange.