Uniswap, the leading decentralized exchange by trading volume, now processes more ETH/stablecoin volume than any centralized cryptocurrency trading platform.
The development marks a milestone for Uniswap, which remained in relative obscurity for a period after its launch in November 2018. DEXes emerged as top exchanges with the 2020 release of Uniswap v2 and ‘DeFi-summer’.
In a January 20 tweet, Uniswap inventor Hayden Adams said that the combined 24-hour volume of the Ether versus USD Coin, Dai and Tether pair protocol was $1.25 billion. On the other hand, the combined volume of Ether pairs against USDC, DAI, USDT and fiat USD generated $1 billion on Binance and $500 million on Coinbase. FTX was $430 million.
Very high gas price
Adams emphasized that the volume milestone comes amid high gas rates on the ETH mainnet.
Hayden’s data indicates that ETH/stablecoin trades represent a third of Uniswap’s total volume. About $3.75 billion worth of tokens have changed hands through the protocol in the last 24 hours.
DeFi data aggregator Llama estimates that Uniswap is currently the 10th largest DeFi dapp by total cross-chain value (TVL) at $7.42 billion. According to the website, nearly 98% of Uniswap’s TVL resides on ETH, with the remaining capital spread across its Polygon, Arbitrum, and Optimism deployments.
While DEX dominates volume in ETH/stablecoin and many ERC-20 token pairs, the platform lags behind BTC activity. Wrapped BTC pairs accounted for just 3.8% of Uniswap volume today.
Uniswap started to gain serious momentum after the release of its v2 iteration in May 2020. At the time, “DeFi summer” had captured the attention of the broader crypto ecosystem and was establishing decentralized finance as a major segment in digital assets. .
While Uniswap’s trade volumes fluctuated between $20 million and $40 million during the first half of 2020, growth began to deteriorate during the third quarter. After hosting $100 million worth of weekly activities for the first time in June 2020, Uniswap went from processing $800 million to $5.8 billion a week in August of that year.
Rival DEX SushiSwap launched during the same month, sparking a proliferation of food-themed Uniswap forks offering aggressive token incentives to divert liquidity from v2. Uniswap responded by releasing its own token to wallets that had already interacted with the protocol the following month, regaining its position as TVL’s top DEX.
Uniswap released its third version in May 2021. V3 sought to improve the capital efficiency of automated market maker exchanges by allowing liquidity to select ranges in which its capital would be invested. Uniswap posted weekly volume records in May and November 2021, scoring approximately $26 billion on separate occasions.
Uniswap v3 generated around $3.75 billion in trading in the last 24 hours from a TVL of $3 billion, while its v2 deployment generated $566 million with a TVL of $3.75 billion.