Uniswap, the leading decentralized exchange by trade volume, now processes more ETH/stablecoin volume than any centralized crypto trading venue.
The development marks a milestone for Uniswap, which resided in relative obscurity for a period after its launch in November 2018. DEXes emerged as leading exchanges with the launch of Uniswap v2 and ‘DeFi-summer’ of 2020.
In a Jan. 20 tweet, Uniswap inventor Hayden Adams said the protocol’s combined 24-hour volume from Ether pairings against USD Coin, Dai, and Tether was $1.25B. By contrast, the combined volume from Ether pairings against USDC, DAI, USDT, and fiat USD drove $1B on Binance and $500M on Coinbase. FTX was $430M.
Sky-High Gas Fees
Adams emphasized that the volume milestone comes amid sky-high gas fees on the Ethereum mainnet.
Hayden’s data indicates that ETH/stablecoin trades represent one-third of Uniswap’s entire volume. Roughly $3.75B worth of tokens changing hands via the protocol over the past 24 hours.
Data aggregator DeFi Llama estimates Uniswap is currently the 10th-largest DeFi dapp by cross-chain total value locked (TVL) with $7.42B. According to the website, nearly 98% of Uniswap’s TVL resides on Ethereum, with the remaining capital spread across its Polygon, Arbitrum, and Optimism deployments.
While the DEX dominates for volume in ETH/stablecoin and many ERC-20 token pairings, the platform lags for Bitcoin activity. Wrapped Bitcoin pairings represented just 3.8% of Uniswap volume today.
Uniswap began to build serious momentum after launching 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 within digital assets.
While Uniswap’s trade volumes hovered between $20M and $40M during the first half of 2020, growth began to compound during the third quarter. After hosting $100M worth of weekly activity for the first time in June 2020, Uniswap was rocketed from processing $800M to $5.8B a week during 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 siphon liquidity away from v2. Uniswap responded by airdropping its own token to wallets that had previously interacted with the protocol the following month, recapturing its position as the top DEX by TVL.
Uniswap launched 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 their capital would be deployed. Uniswap posted all-time highs for weekly volume in May and November of 2021, tagging roughly $26B on separate occasions.
Uniswap v3 drove roughly $3.75B worth of trades over the past 24 hours from a $3B TVL, while its v2 deployment generated $566M in trades with a $3.75B TVL.