Research conducted by The Block has revealed that during September 2020, Uniswap reported approximately $15.4 billion in monthly volume — 65% of the total reported by DEXs for that month, which was $23.5 billion. By comparison, COINBASE reported $13.6 billion in monthly trade volume.
The significance of this shift is quite monumental in the decentralized finance world and shows that DeFi is very much here to make a name for itself. Coinbase has traditionally acted as an easy to use entry point for retail users, but it would appear times are changing.
As the total value locked in Ethereum DeFi crosses the $10 billion mark for the first time Uniswap is the clear frontrunner. The protocol is responsible for approximately 20% of the total value locked in Ethereum DeFi right now or $2.05 billion at the time of writing.
The total value locked in DeFi contracts has risen to nearly $11 billion at the time of writing, according to the DappRadar DeFi page. The spikes witnessed in Uniswap’s volume can be mainly attributed to two events. First of all, the explosive growth of the decentralized finance ecosystem overall (DeFi) and yield farming of governance tokens caused major surges in decentralized exchange activity.
The recent addition of NFT marketplaces to the hype has only reinforced Uniswap’s position. Secondly, Uniswap’s introduction of the UNI governance token led to a frenzy on the platform. As a result, Uniswap has evolved into the go-to platform to trade DeFi tokens and as the total value locked in DeFi surged upwards it only enhanced the growth of Uniswap’s volume.
The exponential growth of DeFi
As recently reported in our Q3 Dapp Industry Report 2020 thus far has been the year of DeFi ecosystem development and volatility. At the end of Q3 2019, we barely see 3,200 active wallets but within Q3 DeFi became the largest ecosystem in Ethereum holding 90% of total daily active wallets.
The majority of the DeFi ecosystem dapps showed improved activity but the biggest surge came from Uniswap. Almost 74% of the DeFi ecosystem’s daily active wallets belong to Uniswap which showed growth of 560% quarter-on-quarter.
We are witnessing huge spikes within daily active wallets, transaction volumes, and the total value locked within the DeFi ecosystem. This gives us an understanding that the category together with governance tokens generated enormous results that led to Ethereum’s growth regardless of high gas prices.
Short term hype or long term success?
Uniswap first surpassed Coinbase Pro in daily volume on Aug. 30. Since then, it has continuously remained competitive with the top U.S. exchange.
The consistently high volume from Uniswap has occurred despite a considerable slowdown in yield farming and the governance token craze. Suggesting that the uptrend of decentralized exchanges maintaining high volume is sustainable in the long term.
Looking at Uniswaps 24hr unique active wallets or UAW figure it is clever to see that in regards to daily activity Uniswap is way out front. So far in fact that the closest competitor in that metric is over 15k UAW away.
Evolution is inevitable
Uniswap’s recent trajectory has been stellar. The release of the UNI governance token and subsequent yield farming has set a precedent in the sector. Furthermore, this week’s news that it has outpaced one of the world’s leading exchanges is not to be taken lightly.
Now we see the growing NFT space merging DeFi with collectibles and gaming through issuing their own governance tokens. In some cases allowing the wrapping of already owned NFTs and furthermore introducing the idea of fractional or sharded ownership.
Over the past month, the space saw over 53K trades and over $6.8M in volume. With NFTs around some popular projects like Axie Infinity being traded for tens of thousands of dollars in crypto assets, NFT sharding has seen renewed interest. The shard market is currently worth more than $500K.
Rarible provided the most recent and notable example as they gifted RARI tokens to past and present users of the platform to incentivize creators and buyers. The new NFT Marketplace analytics page on DappRadar shows Rarible leading the top 5 NFT Marketplace dapps in regards to trader count and its impressive volume.
