Popular decentralized exchange Uniswap is enjoying increasing volume in 2021, just like the centralized exchanges.
Ever since November 2020, the weekly volume on the platform only went higher, starting from just under $2 billion through the month to climb above $3.50 billion towards the end of December. January saw these numbers rising past $5 billion only to have a record $8.2 billion in the Feb. 21-27 week.
Things are currently slowing down to $5 billion weekly volume, as the cryptocurrency market consolidates in the macro backdrop of the rising USD index, smaller users trying cheaper alternatives like Pancakeswap on Binance Smart Chain (BSC), and NFT mania capturing the attention.
Interestingly, while DEX Uniswap is managing about $1 billion in daily trading volume, its valuation is only $32 billion. Compared to this, Coinbase does $2.5 billion with a valuation of $100 billion.
“Now, let’s think about a fair price for UNI,” commented DeFi.
Just past weekend, UNI joined the top 10 cryptocurrencies list as the price hit a new high. As of writing, at a price of $32, UNI has a market cap of $16.71 billion.
But while on Uniswap, the fees are 0.30%, Coinbase charges a hefty up to 4%, which can rise further after the markup. During high volatility, both the exchanges recorded higher volume and increased fees paid by users.
The big difference is in their users; Coinbase, which was launched in 2012, revealed in its filing with the SEC that it had 43 million verified retail users in Q4 2020. The company also reported 7,000 institutions and 115,000 ecosystem partners.
Meanwhile, in November 2018 launched Uniswap has just reached 1 million users, as per Dune Analytics.
While Uniswap has a long way to go, the growing DeFi ecosystem can speed up things.
Just last week, as UNI’s market cap surged to a new all-time high on Sunday, UNI active addresses also increased 4.3% week-over-week, and transfers increased by 10%.
The governance token of the dominant DEX further had a massive 470.3% increase in adjusted transfer value after it spiked to over $4.9 billion, from a daily average of less than $1 billion, on March 5th.
The DeFi token also has a relatively high SER, The Supply Equality Ratio inspired by the 20:20 Ratio – a traditional wealth inequality metric that compares the average income of the richest 20% of society to the poorest 20%.
Among the major DeFi assets, UNI has the highest distributed supply with SER of more than 0.002, likely due to its initial airdrop to platform users, as per Coin Metrics. AAVE, whose SER increased significantly since the start of the year, and COMP also have relatively high SER, just under 0.001.