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How Far Has Uniswap And Sushiswap Come?

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Two weeks into 2021, where do Uniswap and Sushiswap platforms stand?

2021 started off with a bang for the cryptocurrency market and the world of decentralized finance [DeFi] was not left behind. Last year was a big year for the DeFi space and experts argue this year could be even better. Two of the most talked-about platforms in the sector were Uniswap and its clone Sushiswap whose battles kept the community occupied most part of 2020.

A Wrap up of Uniswap & Sushiswap

Uniswap

Uniswap has seen astonishing growth over the past several months. As per Total Value Locked [TVL] in terms of the US Dollar, the DeFi platform stood at the third position totaling a whopping $2.65 billion. Moreover, Uniswap had 70.3K Bitcoins and 2.4 million Ether locked in it.

Sushiswap, on the other hand, was positioned at the 7th spot with $1.74 billion in terms of TVL in USD with 1.6 million Ether and 46.3k Bitcoin locked in it.

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Even as TVL is undoubtedly the most popular metric for measuring the growth and activity of DeFi dApps, it, however, projects an incomplete picture of the various ways the DeFi wave has intensified over the past couple of months, especially on the Ethereum network. Hence, to comprehend the activity on both the protocols, it is important to complement the TVL figures of the respective protocols with other metrics.

Important Metrics To Consider

In terms of userbase, Sushiswap has 49,816 as of the 14th of January and has witnessed a steady growth since its inception back in September 2020. It recorded a 24-hour trading volume of $163 million. Uniswap, however, boasts a much higher figure both in terms of users, which was found to be at 728,180 while its trading volume currently stood at $1.22 billion.

Moreover, Uniswap’s gas consumption has been reported to be quite high. Owing to the creation of nearly 25k different markets for trading and the massive userbase, Uniswap surpasses every other DeFi application on Ethereum with respect to gas consumption.

In terms of the total DEX volume as well, Unsiwap takes the cake home with 99.8% of the share while Sushiswap stands at 0.23%. Despite being arch-nemesis, both the projects have managed to create a niche for themselves in the market thanks to the advantages that a decentralized system in place which makes that possible. Messari’s Ryan Watkins, on a similar note, stated,

“The best part about the competition between Uniswap and SushiSwap is that it is completely transparent and trackable in real-time. No need to wait for financial filings, no need to make estimates, It’s all auditable on-chain. An open window into competition at hyper-speed.”

Along the same line, Erik Voorhees, the CEO of ShapeShift also noted,

“A public, real-time liquidity battle between two relatively decentralized crypto pools. It exists in cyberspace, nobody is forced to participate, & nobody can turn it off. This is sci-fi digital hyper-capitalism finance… and it’s coming for the banking system”

Uniswap Trading Volume Goes Wild As Numbers Hit New Peak

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2020 saw a huge shift in focus from the grips of centralized financial sector to decentralized finance [DeFi]. Among the DEXs, which started dominating on-chain flows, Uniswap in particular, stood out.

Unsiwap Protocol went on to become one of the most prominent platforms witnessing significant traction in a very short period of time. In the latest development, the daily trading volume [7d moving average] across all asset pairs on the decentralized exchange reached an all-time high.

This was revealed by the blockchain intelligence platform, Glassnode which further noted that on an average, $780 million were traded per day in the past week. With this, the figures surpassed the previous peak that hit back in early September 2020.

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DeFi went on to become one of the biggest trends last year with Unsiwap leading the DEXs. With just 10 days to this year, the DEX witnessed an astounding growth.

Uniswap Gives Stiff Competetion to Centralized Counterparts

Owing to the prolonged rally of Bitcoin and the crypto market, the net inflow of ERC-20 stablecoins to exchanges have been breaking records almost every single day.

With $2.3 billion, Binance noted most inflows of stablecoins amidst the bull run. But the decentralized exchanges were not far behind either, and have acquired a large portion of the on-chain volume along with the stablecoin inflow in this bull market.

It was none other than Uniswap that was ranked in the second with $708.6 million in the middle of the other centralized exchanges.

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Other CEXs such as Huobi, OKEx, Coinbase, and others were observed to be trailing behind Uniswap with stablecoin balanced below $600 million. As COVID-19 fears gripped the world, the industry caught the bug of DeFi with crypto enthusiasts feverishly “FOMOing” on lending protocols, borrowing stablecoins and mining liquidity.

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Thanks to this trend, over the past several months, Uniswap has grown to become the world’s largest decentralized exchange by volume. According to Dune Analytics, it even had more than 44% of the DEX market share, at the time of writing.

Hence, it was not just market participants that appeared to be flocking Uniswap. Stanford Blockchain Club became the latest group to verify itself as a Uniswap delegate. With this, the group surpassed a student group at rival California university UC Berkeley to become one of the largest delegates and position itself in the ninth rank.

SushiSwap and Uniswap Drama: Is SUSHI Handling More Value Than UNI?

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Blockchain activity has been exhibiting that SushiSwap’s native SUSHI token was handling a significantly higher value than Uniswap’s UNI token. As of December 16th, SUSHI tokens were responsible for 74.35% in terms of the combined value transferred by the two tokens. UNI’s share on the other hand was found to be at a meager 25.65%.

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As depicted by the above chart, Pink represents SUSHI’s share while Green represented UNI’s share.

The reason as to why the vampire protocol’s token, SUSHI has been moving more value can be attributed to the fact that SushiSwap provides greater support for liquidity mining. This is a critical process by which the token holders in the market can earn each platform’s native token.

Why is Uniswap lagging?

This has been a setback for Uniswap which ran liquidity mining starting from the period of18th of September to the 17th of November. During the two months, Uniswap distributed 20 million UNI. However, the decentralized exchange has not notified if it plans to continue this feature. Moreover, a vote to continue running liquidity mining with lower rewards has so far failed to meet quorum.

Despite this, Unsiwap’s overall trading volume far exceeds that of its clone which handles quite less volume than the former. While acknowledging that UNI held an undeniable moat in the market, DeFiance Capital’s Eugin Lee noted that new products and innovations could still disrupt it, something that the community is seeing in SUSHI currently.

The two rival protocols have every ardent follower, but according to Lee, “both can do well”. Justifying the argument, Lee went on to provide a “moat” that is possessed by both UNI and SUSHI and stated that can essentially both list tokens that centralized exchanges cannot.

In addition, the liquidity provisions in UNI and SUSHI returns an LP token collateral that can be re-staked or restructured into other farm or collaterals protocol. This is something that their centralized counterparts or even aggregators do not offer.

Furthermore, Low transaction fees and slippage among other decentralized exchanges is another plus point according to the analyst who asserted that low trans fees and slippages mean that aggregators will prioritize UNI and SUSHI since the transaction fees and slippages for both DEXs were currently the same.

In short, though market participants may prefer Uniswap as an exchange, it cannot be ignored that the market was found to be moving a larger amount of SushiSwap’s native token. And considering the nascency of the space, there is enough space in the industry to accommodate both and let time decide what drives up the appeal of both the tokens in the coming days.

 

DeFi Platform Uniswap Bears A Loss as SushiSwap Adopts a Clever Strategy

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The decentralized finance [DeFi] realm has taken a back seat after an impressive streak. DeFi’s darling, Uniswap for instance was struggling to retain its position as the world’s largest decentralized exchange [DEX]. This was evident from its abrupt drop in terms of the total value locked [USD] in the protocol.

Since registering $2.71 billion on the 17th of November to drastically falling by more than 5% as the TVL figures dropped to $1.19 billion just two days later, trouble seemed to have been brewing for Uniswap.

TVL

Meanwhile, its vampire clone SushiSwap has significantly increased its TVL and is aggressively pursuing additional liquidity as revealed in the latest insights published by blockchain analytic platform Santiment. On the 17th of November, SushiSwap’s TVL rose from $406.7 million and $1.052 billion in a period of less than 48 hours posting an increase of nearly 160%.

In an interesting turn of events, Uniswap’s fall and its rival’s rise coincided with the conclusion of its UNI liquidity rewards program on the same day.

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As Uniswap’s liquidity took a massive hit, the UNI token holders have commenced the process of voting for a new governance proposal that aimed to reestablish rewards in the form of the native UNI tokens for liquidity providers.

Uniswap-SushiSwap Battle Goes On

Advanced by Audius’ Strategy Lead, Cooper Turley, this proposal essentially seeks to cuts the amount of UNI rewards in half compared to the earlier program. With this, the new proposal would see 1.25 million UNI allocated to each pool monthly for a period of two months that corresponds to 10 million UNI tokens total, which in turn makes up for approximately 4.6% of the native token’s current circulating supply.

This essentially depicted that Sushiswap has once again extracted Uniswap’s liquidity yet again. Liquidity providers [LPs] from the latter jumped ship after the native token’s liquidity mining rewards ended and are moving to Sushiswap for SUSHI rewards.

Previously, the four pairs on Uniswap, which were DAI-ETH, USDT-ETH, USDC-ETH, and WBTC-ETH basically grabbed the fees from the AMM desk and UNI token rewards. However, following the conclusion of the incentives, LPs exited the ecosystem in search of more profits. Taking an advantage of which, Sushiswap announced liquidity mining rewards just a day before Uniswap’s expiry.

Uniswap’s UNI Could Head For A Recovery Despite Capitulation

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The tokens of prominent decentralized finance [DeFi] projects have witnessed a dull price movement so far. Despite their initial success, owing to the massive FOMO that drove the token’s valuations, currently, signs of recovery looked bleak.

Uniswap’s native token, UNI has also seen massive capitulation over the course of several weeks which has triggered a significant decline. However, according to the blockchain intelligence platform, Santiment, an articulated Uniswap holders capitulation may build nice reversal momentum.

Uniswap’s UNI Token Gears For Bullish Reversal

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MVRV Opportunity/Danger Zones essentially relies on average trader returns from various timeframes to determine danger zones or sell points and opportunity zones or buy points. During times when average trader returns are low, MVRV views the metric as a bullish signal. According to the latest Santiment charts, UNI has a very low average trader returns, this was indicative of a low-risk opportunity to start entry and thus push the price higher.

A Potential Volatility Lurks in the Corner

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According to the latest insight by Santiment, UNI’s saw the greatest spike ever, in terms of Token Age Consumed. The metric suggests the number of tokens/coins changing addresses on a particular date, multiplied by the days since it last moved. In short, it provides data on the movement of dormant coins. For UNI, the spike meant that a significant amount of previously dormant tokens/coins were moved either between exchanges or wallets.

This pointed towards incoming volatility within the Uniswap market.

UNI’s Price Takes A Hit; But Metrics For Holders Appear Bullish

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Additionally, the count for the non-airdrop holders has increased over time. This was a positive indicator signaling a rising interest in the coin. Over the past 24-hours, UNI was down by 8.74% which drove its coin to $2.64. However, UNI appears to have bottomed out at $1.79 on the 5th of November. If this narrative holds true in the coming days, UNI could witness a surge to its critical resistance of $3.28.

TVL in DeFi Nears Fresh ATH of $13 Billion Despite the Decline in DEX Volume

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2020 has been a success story for the decentralized finance [DeFi] ecosystem. DeFi has been around for a couple of years but it gained massive traction in the second and third quarters of this year and the overwhelming rise was reminiscent of the previous ICO boom.

Adding yet another feather to its cap, the total value locked [TVL] in DeFi surged to a whopping $12.58 billion on the 25th of October. This surge coincided with the latest bullish price action of the cryptocurrencies which triggered optimism in the space. Uniswap with a TVL of $2.68 billion and dominated the charts by 21.65%. The popular DEX was followed by Maker with $2.13 billion, WBTC with $1.44 billion, Aave $1.13 billion, and Compound with $1.08 billion in TVL respectively.

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Ethereum [ETH] locked in DeFi also spiked as the altcoin surged above the $400-level more than a month later. According to DeFi Pulse, the figure was recorded to be at 9.008 million Ether at the time of writing. BTC and WBTC locked in also noted a mild surge to 171.2K.

What has further legitimized the DeFi space is the foray of some of the big names in the crypto industry. The investment giant, Pantera Capital recently disclosed that its Digital Asset Fund intended to invest more heavily into DeFi assets than the rest of the market.

But could DeFi lose steam?

Talking about the potential capabilities of DeFi instruments, Chris Burniske from venture capital firm Placeholder had recently noted,

“If you think DeFi will have a smaller impact on ETH than ICOs, you aren’t paying attention. The ICO boom showcased Ethereum’s ability to perform one financial service: early-stage capital formation. DeFi will showcase Ethereum’s ability to perform all financial services.”

Bitcoin has started to show signs of strength over other cryptocurrencies as its dominance rose to 61%. On the other hand, Ethereum has seen its popularity grow throughout 2020 due to the rise of DeFi. Having said that, skepticism still exists in terms of outlook and long-term sustainability of DeFi. In addition, trading volumes on Ethereum-based decentralized exchanges have taken a plunge this month and was down by 44% in the past 30 days. 

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But it is not all bad. The declining trading volume could mean that the market is coming back to rational levels. The soaring TVL indicated a positive sentiment in the DeFi space and the latest stats could potentially indicate a healthy market.

Uniswap Witnesses Staggering 4,700% Growth in Q3 2020

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DeFi is the deal

Q3 2020 has been the best quarter of decentralized finance [DeFi]. Although this space is not a 2020 invention, its popularity reaching the peak was primarily catalyzed by the significant growth was the yield farming trend. This quadrant not only underscored Ethereum’s role as the underlying technology but also paved the way for its competitors, such as  TRON and EOS.

Out of all the DeFi platforms on Ethereum, it was undoubtedly Uniswap that saw the most impressive quarter among the top five. According to the crypto-analytic platform ‘The TIE’, Uniswap started the quarter ranking 5th in the DeFi ladder with just $45 million TVL. At the end of the third quarter, it was positioned in the 1st place at $2.1 billion, an increase of 4,700%. Furthermore, in September, Uniswap became the 4th largest crypto exchange by monthly volume.

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More broadly, in the third quarter, the TVL has skyrocketed from just $2 billion to $11 billion, noting an appreciation of more than 453%. And it’s up 1,560% year-to-date.

Assets and decentralized exchanges [DEX] saw the biggest growth. Both the sectors were up more than 1500% in TVL. In addition, all four main sectors, such as lending, DEX, assets, and derivatives, increased by triple-digit percentages. Leading the charts was the ‘lending’ market standing at a TVL of a whopping $4.5 billion while derivatives had the smallest increase in Q3.

TheTie

Closely mimicking Ethereum’s price action, several DeFi tokens grew significantly. What further catalyzed the traction was the listing announcements of the tokens by popular cryptocurrency exchanges such as Binance, Coinbase, OKEx among others. DeFi tokens tanked shortly after the crypto market underwent several corrections.

But despite this, the returns were positive. Along the same line, The Tie mentioned,

“Returns were positive for 13 out of the top 20 DeFi tokens. The median DeFi asset is up more than 32% in Q3, while YFI saw astronomical returns of over 2,000%! The total DeFi market capitalization sits at $9.3 billion and represents 2.75% of the total cryptocurrency market cap.”

 

Ethereum 2.0 Launch, Over 460k ETH Options Expiring on Friday Could Drive Massive Volatility

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Despite the fact that the Ethereum platform has existed mostly in the shadow of Bitcoin, it has managed to spearhead several independent altcoin rallies. Throughout the year, Ethereum has shown sharp price movements with respect to Bitcoin and according to the latest development, volatility is coming back to Ethereum.

This was noted by the crypto research firm Coin Metrics in the latest edition of the State of the Network report which stated that the reason for this is primarily because of the surprise launch of Uniswap’s governance token ‘UNI’ on Ethereum mainnet and the heightened sell pressure that has overpowered the market.

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However, since mid-2019. the volatility has been considerably low as compared to previous levels partly due to the foray of new market participants as well as the maturity of the crypto space. But there has been a turn of events as volatility seemed to have made a comeback one again. The report mentioned,

“This is significant because it follows a period of sustained levels of low volatility not seen since mid-2019. This increase in volatility precedes some significant events, namely the launch of the first phase of ETH 2.0 and, more urgently, the September 25th options expiration.”

As Ethereum 2.0’s much-anticipated move to Proof-of-Stake gets closer, the volatility of the crypto-asset is bound to have some effect. TWJ had previously reported that this has led to the increased development activity on Github which rose to a 7-months high.

Friday could be a big day for the ETH market

But this isn’t the only factor that has propelled a rise in volatility. On the derivatives front, Ethereum also has a record-breaking 460,000 ETH options expiring this Friday, on the 25th of September. A huge chunk of which, more specifically 90% of the expiring Ether options are held on derivatives platform Deribit.

According to the report, this event is likely to add additional volatility to ETH’s price movement throughout the week, “as traders look to hedge exposure on these positions, work out of them, or possibly take action in the spot market in anticipation”.

DeFi Project Yearn.Finance’s Founder Wants to be Uniswap Protocol’s Delegate

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Uniswap has been making quite a buzz in the DeFi space. The popular lending protocol recently announced the launch of its highly anticipated UNI governance token on Ethereum mainnet, which has already had a massive impact with the token’s price skyrocketing followed by several centralized cryptocurrency exchanges such as Binance and Coinbase Pro opening trades for it.

This Ethereum-based protocol’s popularity has caused even its contemporaries to jump into the UNI bandwagon. Uniswap had earlier noted that it wants a “diverse and high-quality set of protocol delegates”, for the purpose of discussions and communications around potential governance proposals. In this regard, another decentralized platform, Yearn Finance’s Founder Andre Cronje expressed his intention of becoming a delegate on Uniswap with hopes of influencing its governance.

In a recent tweet, Cronje stated,

“At this point, I do not think it should be a rush to incentivize liquidity pools (this can be abused). I believe we have an opportunity to re-evaluate the tokenomics and distribution. We can help DAI or sUSD reach peg. We can provide support for further development.”

When asked if he would want to push for the YFI-ETH pool to be included for the protocol’s LP reward, the developer revealed,

“At this time, no, it would attract YFI holders to provide liquidity instead of using it for its intended purpose (such as governance). I believe there is better value add that can be done for the overall ecosystem by utilizing UNI incentives in other proposals.”

According to the protocol governance structure, Uniswap team members will not participate directly in governance for the foreseeable future, but the members could, in fact, delegate votes to protocol delegates. Additioanlly, all UNI holders will have ownership of the entire governance process.

Besides, Cronje’s tweet for delegation comes days after the developer questioned whether the “unexpected” launch of UNI on the ETH mainnet was in response to the Sushiswap clash and criticized the network for letting the latter influence its announcement date.

Binance On-Boards Uniswap’s UNI Token Minutes After Its Launch

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The DeFi fervor continues to take over the crypto-verse as new tokens enter the market. After prominent DeFi lending and borrowing platform Compound rolled out its COMP token, several others followed suit. The latest DeFi platform to jump the bandwagon is Decentralized Exchange [DEX], Uniswap.

UNI Governance Token

Earlier today, Uniswap, a platform that had been dominating the DeFi space for quite some time announced the launch of its native token, UNI. The decentralized exchange that facilitates swapping of Ethereum-based tokens shared a blog post elaborating on the creation of its latest token. A total of 1 billion UNI tokens have reportedly been minted and would be made available to the community over a period of 4 years. A total of 60% of these tokens would be going to the Uniswap community members while 21.51% would be given to the existing team members and the ones that would be a part of the platform in the future.

The investors of this token would also be benefited with this as they would receive a 17.80% while the advisors would garner 0.069% The post further read,

“UNI will vest to the governance treasury on a continuous basis according to the following schedule. Governance will have access to vested UNI starting October 18 2020 12:00am UTC.”

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Furthermore, the liquidity mining programs will reportedly go live from 18 September up until 17 November primarily focusing on ETH/USDT, ETH/USDC, ETH/DAI, and ETH/WBTC. All these pools would be given 5 million UNI tokens.

Even though the project is out and about, holders of the tokens would be able to engage in voting for allocation, partnerships, and other initiatives only after a period of 30 days from today. Along with the aforementioned activities, the control of the treasury would be postponed until 17 October 2020.

Binance First To List UNI

Malta-based cryptocurrency exchange, Binance, has always been at the forefront of onboarding innovation on to its platform. The exchange was one of the first to list the UNI token. Binance revealed that UNI would be paired against Bitcoin [BTC], Binance Coin [BNB] as well as stablecoin Tether [USDT]. Trading for the above-mentioned pairs would commence from 3:00 AM [UTC] starting today.

However, as a disclaimer, the exchange noted that UNI would be subject to higher risk as it was a new token.

This announcement was further followed by another one where the exchange declared the launch of a UNI/USDT perpetual contract. Trading for this is said to begin post 7:00 AM [UTC] from 18 September. Customers would be allowed to choose between 1-50x leverage.