Uniswap’s phenomenal growth over the short span of time has been lauded by market players and DeFi experts alike. It has emerged as one of the world’s largest decentralized exchange [DEX] sweeping significant volume in the market. However, the trading volume recorded on the 30th March on Uniswap was much higher than normal.
So what exactly happened on Uniswap?
It was DeFi protocol, Delta Financial’s native token, DELTA that was responsible for the brief and fake volumes on Uniswap. The token recorded a trading volume of more than $6.13 billion, meaning, it contributed to roughly 85% of the total volume on the DEX even as the liquidity stood at a little more than $16 million.
Delta is a newbie in the world of DeFi and identifies itself as on-chain options layer which uses a combination of liquidity standards to minimize premiums and provide competitive options price. In short, it essentially aims to solve the problem of expensive and volatile options trading especially due to lack of liquidity.
The large trading volume figures were due to Delta’s liquidity rebasing system. This is essentially an algorithmic mechanism of increasing the price to mint tokens over time. While this seemed similar to that of wash trading, since it requires swapping tokens back and forth in order to trigger high volume and price of a token, the inventor of Uniswap Protocol, Hayden Adams, clarified that while it is not wash trading, it also does not represent “real” volume either.
He also went on to say that the figures will soon be considered untracked volume on Uniswap.
Adams also stated that the current Delta stats will not influence Uniswap’s global trading volume and added that Delta’s strange protocols are the reasons behind the exploding figures.
Delta Financial has hit back with the following tweet:
“All DELTA data is completely frozen, as if trading is not happening at all. To top it off an engineer wrote ‘Scammy Token’ in the PR. Meanwhile, the volume is still misreported on all other tokens.”