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The decentralized exchange Uniswap has set a record $10 billion in trading volume in the past 7 days. Co-founder Hayden Adams posted on Twitter that would be $0.5 trillion on a yearly basis.
Uniswap is a decentralized exchange on the Ethereum blockchain. Because every transaction costs considerable gas fees, usage is likely limited to those with bigger wallets. Yet, according to dapp data from DappRadar, the amount of wallets has recently increased from approximately 30,000 per day in the first week of April to more than 46,000 yesterday.
In terms of total value locked (TVL), Uniswap is king in the DeFi space. There’s no other platform that has so much value in tokens locked into liquidity pools as Uniswap. These liquidity pools are needed because that’s the money traders use to trade their tokens. In exchange liquidity providers get a cut of the transaction fees.
However, because of the Ethereum gas fees, competition is heating up on other blockchain platforms. Especially BINANCE Smart Chain is seeing major growth. Their main platform is PancakeSwap, which has more than 305,550 active wallets in the past 7 days. That’s almost 20% more than Uniswap. In terms of trading volume, they are now surpassing Uniswap, driven by the 123% price increase of BNB in the past 30 days.
The only metric in which the Ethereum DeFi ecosystem outperforms Binance Smart Chain is in terms of the TVL. At the end of March, the Ethereum ecosystem had $54 billion in value, while Binance Smart Chain was at $20 billion. Continuous growth pushes Binance Smart Chain forward, driven by increased user interest and low fees.
Uniswap innovation is coming
Currently, Uniswap is working on the next version of its exchange: Uniswap V3. This next-generation decentralized exchange will use NFTs to tokenize liquidity positions. The team will protect their innovation with a 2-year business source license, to prevent forks and so-called liquidity vampire attacks.
Liquidity providers (LPs) on Uniswap are basically market makers at the stock exchange, as they provide the liquidity and help traders to jump in and out of their positions. Thanks to the integration of NFTs, liquidity providers become more flexible. They can for example only provide liquidity when a token is trading between a certain price range.
Uniswap V3 is coming to Ethereum on May 5th and mid-May to scaling solution Optimism.
- How to use Uniswap
- Dapp Industry Report Q1 2021
- Track Your DeFi Portfolio
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