Ethereum trading protocol Uniswap is among the most popular projects in the entire cryptoeconomy right now, and its trailblazing rise continues to translate into new records for DeFi’s leading exchange.
As highlighted by crypto metrics firm Token Terminal on September 9th, Uniswap’s monthly revenues via fees in September have already passed the protocol’s previous August 2020 revenues record, and we’re just barely into the second week of the new month.
— Token Terminal (@tokenterminal) September 9, 2020
The revenue surge comes as Uniswap became a gravity well for volume over the summer. The decentralized exchange has set monthly volume records for three consecutive months in a row now and is decidedly on pace to do it for a fourth:
- June 2020 ($452 million)
- July 2020 ($1.76 billion)
- August 2020 ($6.7 billion)
- September 2020 circa Sept. 9th ($6.5 billion)
Moreover, according to Token Terminal this volume growth has put Uniswap on pace to achieve ~$400 million in total fees paid on the year. That’s really impressive revenue for a young and rising DeFi project, no matter how you slice it.
This ascension into the cryptoeconomy’s primetime has put Uniswap within reach of eating centralized exchanges’ lunch for years to come. For instance:
- On August 29th, Uniswap’s 24-hour trading volume ($426 million) bested U.S. crypto exchange giant Coinbase’s 24-hour volume ($348 million) for the first time ever.
- On August 31st, Uniswap’s ETH/SUSHI trading pair brought in over $175 million in volume — more than the combined volumes of centralized exchanges Bitstamp, Bittrex, and Poloniex in the same span.
That Uniswap has become the premier venue for many token trading pairs so fast suggests that the protocol’s dominance over centralized exchanges — which are permissioned, KYC-ed, and account-based unlike Uniswap — is only just beginning.
If the future of finance is open and protocol-based like we think it is in the cryptoeconomy, then Uniswap gives us a glimpse at what that future will increasingly look like.
Going Beast Mode
Not only have volume and revenues been booming for Uniswap lately, but just about everything else, too:
- Traffic to uniswap.exchange has been “mooning” this summer.
- The DEX added nearly 60,000 new users in July 2020.
- 162,000 unique addresses interacted with the exchange in August 2020, easily a new record.
- Uniswap temporarily became the largest DeFi project with $1.77 billion in assets under management on September 3rd.
These advances come on the heels of the introduction of the optimized Uniswap V2 system back in May and ahead of the coming V3 contracts, the latter of which will be an even bigger gamechanger for the cryptoeconomy.
Yet the darling DeFi project hasn’t been without tribulation lately, either.
Attack of the Vampire
Uniswap is an automated market maker (AMM), which means users can deposit tokens to become liquidity providers (LPs) for the upside possibility of earning a profitable cut of Uniswap’s trading fees.
In late August, a Uniswap fork named Sushiswap launched and began enticing Uniswap LPs to jump ship via a $SUSHI token distribution. The idea? Move liquidity over from Uniswap to earn $SUSHI rewards. This maneuver has since been dubbed a “Vampire Attack” in the space, a reference to “bleeding” a protocol of its liquidity.
However, within two weeks of Sushiswap’s DeFi arrival, its pseudonymous creator Chef Nomi blindsided the community by selling a massive trove of $SUSHI holdings (after insisting they wouldn’t) for $13 million worth of ETH.
The selfish ploy massively tainted Sushiswap, but the de facto Vampire Attack has proceeded after Chef Nomi passed off control of the project to Sam Bankman-Fried, the CEO of crypto exchange FTX.
Accordingly, a migration to a new Sushiswap system kicked off on September 9th, and within hours Uniswap’s total value locked (TVL) dropped from $1.43 billion to $409 million. The episode has spurred speculation Uniswap will be releasing its own token soon reward LPs and fight fire with fire.