Uniswap tops $50B in lifetime volume, but where's it coming from?

Uniswap tops $50B in lifetime volume, but where's it coming from?

December 15, 2020

Leading decentralized exchange Uniswap has surpassed $50 billion in all-time trade volume, a major milestone for the DEX sector.

On Dec. 15, Uniswap creator Hayden Adams tweeted data indicating the platform has processed a life-time volume of $51.7 billion across 26,000 unique trading pairs — equating to nearly $2 million per pairing on average.

If Uniswap were to maintain its recent volumes of $10 billion per month over the past three months, Adams estimates the platform would exceed $1 trillion in life-time volume in eight years.

Some from the crypto community have expressed skepticism regarding the source of much of Uniswap’s volume — with the platform featuring no KYC, and no vetting process for listed tokens.

Twitter user ‘cyber_hokie’ insinuated that much of the platform’s volume came from darknet markets, money laundering, and wash-trading — although Uniswap’s fixed fee schedule would make wash-trading cost prohibitive.

The platform has been a destination for ill-gotten funds. In September, the hacker who stole $200 million of crypto from Hong Kong-based exchange KuCoin sent $1.2 million worth of SNX to Uniswap for laundering, intensifying concerns regarding the potential for criminal actors to abuse the platform.

Twitter user ‘QueenCryptoCat’ speculated that “half” of Uniswap’s volume may have been generated by tokens that ultimately comprised little more than ‘rug-pulls,’ asking:

“Is it possible to break down the rug v. vs legitimate volume?” 

Since launching its second “V2” iteration on May 18, Uniswap’s total value locked has skyrocketed from $36.5 million to rank as the fifth-largest DeFi protocol with $1.37 billion today, according to DeFi Pulse.

Uniswap has faced constant competition from forked clones and “vampire attacks” seeking to siphon away its liquidity, with rival automated market maker SushiSwap currently ranking behind Uniswap as the sixth-largest DeFi project with $1.07 billion under management.

According to Dune Analytics, Uniswap represents 59.5% of weekly DEX volume, followed by 0x with 12.9%, SushiSwap with 11%, and Curve with 10.2%.

Uniswap also dwarfs its opponents by number of traders, with more than 101,000 unique addresses interacting with the protocol in the past seven days. SushiSwap ranks second with 3,392, followed by Kyber with 1,662, Curve with 982, and 0x with 859.

The highly anticipated Polkadot-native DEX Polkaswap may also emerge as a major competitor to Uniswap in 2021, although an estimated release date for the project is currently unknown.

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