Uniswap seems like just another word for cryptocurrency buzzword, but for those of you who know, it’s the latest entry to fast-moving wealth.
The so-called DEX is the hottest trading platform in the digital asset niche of decentralized finance or DeFi. In less than two years since its inception, Uniswap’s average daily trading volume has grown to around $ 220 million, according to data tracker CoinMarketCap.com.
Messari estimates that this is the largest and fourth-largest DeFi exchange in the crypto world, behind the industrial hippos of Binance, OKEx, and Huobi.
Flight to Uniswap
Coin publishers and dealers are flocking to Uniswap because it is the platform of choice for crypto strategies such as mining. Some dealers make triple-digit returns by collecting and lending cryptocurrency for interest and fees while often providing additional coin incentives. While many activities resemble online gambling and Ponzi programs, speculators will not be deterred.
Paul Veraditakit, a partner at Menlo Park, described it as phenomenal. He adds that it is clear the influence of decentralized exchanges on markets and possibly outperforming centralized exchanges.
Unlike most traditional crypto exchanges, Uniswap does not charge issuers any fees for registering new tokens and generating revenue through transaction fees. It also does not verify users’ identity, which most traditional cryptocurrencies have started due to regulatory pressure to get rid of money laundering and other illegal activity.
According to CoinMarketCap, Uniswap currently lists 845 tokens. Binance, the world’s largest cryptocurrency exchange, lists 820 coins.
Uniswap runs through a software, in most cases, not controlled by anyone. While the programmers’ team is working to improve it, the exchange’s maintenance is by its community of users.
Eyeing the Top
So far, Uniswap has proven its resilience. In August, an unknown person copied Uniswap’s code and managed to absorb some of Uniswap’s liquidity. Since then, the stock market has grown bigger, thanks in part to introducing its token, which helps increase customer loyalty. The market capitalization of UNI tokens on the exchange is around $ 560 million.
Regulators are yet to accept Uniswap openly. Currently, large institutional investors appear to be moving away from DEX, mainly used by retail investors.
Uniswap volume is generated by relatively few users, according to Kyle Samani, co-founder of Austin, Texas-based Crypto Hedge Fund Multicoin Capital Management. It is estimated that only 50,000 to 100,000 people have used Uniswap by September 1. In comparison, Binance had more than 15 million users at the end of last year.
In response, Samani stated that saying something is a winner in a category with less than 100,000 users who have ever used the product is myopic. The race has just begun, and we are in the first inning, he adds.