Total value locked (TVL), i.e. Assets under management is the keystone metric of Ethereum’s emerging decentralized finance, or DEFI, industry. DeFi’s reigning project, the largest TVL, was MakerDAO, a Dai stablecoin-backer and lending protocol. This year, however, Maker has been flipped and projects such as Compound and Aave have risen to the top of DeFi’s list.
Trading Protocol
It is the Ethereum community’s most beloved decentralized trading protocol. This week, Uniswap became the largest DeFi project ever with a TVL exceeding +$1.75 Billion USD.
Uniswap is undoubtedly one of Ethereum’s most successful early projects. It has also shown rapid growth, making it appear that the permissionless trading protocol is just beginning to take off.
Tops are Uniswapable
Uniswap’s TVL jumped to $1.77 billion on Thursday, August 3, after it was named one of the most popular DeFi projects in recent months. This push pushed Uniswap to the top of the DeFi space’s top projects for the first ever time. The new top 10 according to analytics site DeFi Pulse currently look like this:
- Uniswap ($1.77 Billion TVL) Maker (1.55 Billion TVL)
- Aave ($1.47 Billion TVL0)
- Curve Finance ($1.17 Billion TVL)
- yEarn ($906 Million TVL)
- Synthetix ($862 million TVL)
- Compound ($705 Million TVL)
- Balancer ($688 Million TVL)
- WBTC ($448 Million TVL)
- RenVM ($238 Million TVL)
DeFi Market
The DeFi market is hotter than ever interest-wise and DeFi “yield farm” has become a popular opportunity to earn cryptonatives.
Uniswap’s rapid ascent has not been without its challenges. SushiSwap was launched in April. It is a Uniswap fork that includes $SUSHI token economics. This economics rewards Uniswap liquidity providers, and eventually attempts to poach them.
Yield farming opportunities are attracting a lot of attention lately. Many users have been trading assets via Uniswap in order to stake in SushiSwap’s rewards pools.
That’s only the short-term analysis. Zooming in, Uniswap has been a major player in DeFi over the past two decades. It seemed almost inevitable that this popular trading protocol would be successful in the coming months.
Unstoppable DEX
2020 has been a great year for Uniswap thus far. Take this example:
– The volume of the protocol’s volume grew by 225% in Q1 2020, compared to Q4 2019,
U.S. crypto exchange Coinbase split a portion a 1.1 Million USDC allocation into a Uniswap liquidity Pool via the Coinbase USDC Bootstrap Fund. This was in April.
Uniswap V2 was released by the project’s developers in May. This is a next-generation upgrade to the protocol’s original version that has since helped propel DeFi into high gear.
– In June, the protocol’s team raised $11 Million in Series A funding.
– In July, the DEX saw nearly 60,000 new users.
UNISWAPPERP was created by crypto exchange FTX in response to growing interest in the project. It is a perpetual futures contract that tracks the top 10 Uniswap liquidity pool liquidity pools.
Uniswap is a significant upgrade to 2017’s ICO phenomenon. This year, Uniswap will be home to “Intial deFi Offerings”, starting with the public listing of $UMA governance token by the UMA Protocol.
Final Note
Uniswap listed more tokens in the summer than any of its top 10 DEX competitors. Coinbase generated $348 million in volume during the same period. This is the first time Uniswap has flipped Coinbase within 24 hours, but it won’t be the last.
– Last but not the least, Uniswap set a 24-hour trading volume record at $426 million between August 29th & August 30th.
What is the takeaway? Uniswap is having a breakout season and is on track to be a mainstream success.