- Uniswap has lost 76% of its liquidity in one week, suggesting that the boom may be over
- The incredible rise of the exchange last month mirrors the ICO boom of 2017
- The platform will survive, but the days of the 10x meme coin could be coming to an end
Uniswap has taken the crypto world by storm, but with liquidity suddenly down 76% in less than a week, has the unicorn’s bubble burst? In a world that still remembers the 2017 ICO boom, can we say that the Uniswap boom is also now over?
Uniswap Loses 76% Liquidity
Uniswap was undoubtedly one of the crypto success stories of August, with eye-watering amounts of money being thrown at the decentralized exchange. Liquidity on the platform peaked at $1.82 billion on September 5, but the exchange has experienced a sharp drop that resembles a shitcoin exit scamming:
Of course, we’re not suggesting that Uniswap is about to do that, but the month or two during which it was turning food based DeFi memes into 10x winners for early entrants and anything that began with a ‘Y’ was pumping to the stars, are seeming more and more like a flash in the pan.
ICO Bubble Mark II
We likened the Uniswap craze to the ICO craze of 2017, where every influencer under the sun was getting their hands on pre-sales and pumping their coins on crypto Twitter. That lasted for a good few months before fizzling out when the crypto market dumped in 2018, and there is every chance that the same thing could happen again with Uniswap.
It’s not Uniswap’s fault of course. Like EtherDelta back in 2017, Uniswap is merely the facilitator of the madness, but the speed at which the craze took off and the equally rapid fall has all the marks of a phase.
It’s Just a Phase
By December 2017 the ICO market had become saturated with hopelessly illegitimate meme coins designed to make money for charlatans. Just last week we saw the creator SushiSwap selling the project’s development fund to himself, ‘earning’ $13 million worth of ETH in the process.
This came in the wake of several copycat meme coins such as YAM, PIZZA, and HOTDOG all crashed ignominiously due to the fact that their code was as robust and viable as a one-wheeled car.
Uniswap as a platform may prove to be more resilient than the ICO boom, but the days of churning out any old piece of crap and watching it go 50x may well, thankfully, be over.