Uniswap Liquidity and Volume Hits All-time Highs

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  • Liquidity on Uniswap is at record levels while the trading volume is also eclipsing last year’s
  • Stablecoins and ETH make up the vast majority of the liquidity and trading volume
  • What is spurring this return to Uniswap?

The trading volume on decentralized exchange Uniswap is approaching levels we last saw during last year’s period of DeFi hype, while liquidity has hit an all-time high. With the idiocy of the food meme tokens and Yxx copies now thankfully behind us, what is driving the new Uniswap market and what does it suggest about its usage now?

Uniswap Growing Up?

Part of the answer behind Uniswap’s resurgence can be gained by looking at the exchange’s Top Tokens:


Given that yield farming on Uniswap requires both Ethereum and the token of choice to be staked, it is no surprise to see wrapped ETH as the token providing the lion’s share of the liquidity and volume, taking up 40% of the liquidity and almost 4 times more trading volume than the second placed token, USD/C. Let’s not also forget that providing liquidity on Uniswap is a great way to earn yields, which could pay off handsomely at the peak of the bull run.

Looking further down the list we can see a pattern emerging – stablecoins USDT, DAI, and FRAX are the next in line with wrapped BTC the next on the list. This is a huge difference from the DeFi hype in the summer when the top volume coins were a list of what was hot at the time before disappearing, which is an illustration that the exchange, like the DeFi space, is maturing and is finding its purpose.

Regulations Pushing Users to Decentralized Exchanges

Another reason why volume may be returning to Uniswap in the wake of the post-DeFi hype is because traders in countries where regulations are being tightened are looking for alternative ways to do business. One example is the U.S. where the likes of Binance US are operating with a much reduced roster of tokens, tokens which are available on decentralized exchanges like Uniswap with no geographic restrictions.

As authorities continue to push for cryptocurrency exchanges to be further regulated, resulting in the kinds of lengths that Bitstamp was recently forced to go to, we could see more and more traders move to decentralized exchanges like Uniswap to ply their trade.