Uniswap Labs said it has hit the $5 trillion monthly cumulative transaction volume milestone since its launch in November 2018. Millions of users have directly entered the market, and users have paid more and more attention to the transparency, security, autonomy and reliability of DEX in the past three years.
DappRadar data shows that Uniswap v2 and v3 have a total locked value TVL of $9.5 billion. This year, Uniswap launched a Layer 2 version of Optimism and Arbitrum because of the soaring fees of Ethereum. Uniswap Labs said $2 billion of its total size was provided by Optimism and Arbitrum deployments, new deployments that are starting to gain significant traction.
Uniswap v3 begins to exert force
According to blockchain data provider Nomics, Uniswap v3 transaction volume on Arbitrum has soared to an all-time high of $82 million. Uniswap becomes the first DeFi platform to generate $1 billion in fees. This is not surprising. The current trading volume and performance of Uniswap's governance token Uni is still relatively flat.
Uniswap V3 has obviously not really exploded on Layer 2. This is an early opportunity, and you don't expect to hit it big. As more ERC20 tokens are deployed, we will see more trading pairs. In the future, we can see more liquidity protocols and cross-chain protocols deployed on Uniswap V3.
At present, the UX of Uniswap V3 is quite good, and it will get better as the wallet and front end are improved. Over time, with more and more transactions per batch, the cost will drop. Overall, Uniswap typically does 100,000 to 150,000 transactions, as Gas costs are 90% cheaper.
Everyone is a Market Maker
In fact, Uniswap is often at the forefront of innovation, especially for automated market makers (AMMs). Automated market makers are the cornerstone of DeFi. To understand how revolutionary these are, one must first understand how markets work in traditional finance.
Market makers offer assets at two prices, one for sellers and one for buyers. It makes a profit from the difference in price between these two figures. The real business of a market maker is not prices: it's the higher the volume, the higher the profit. Due to the huge amount of single assets required, only institutions can become market makers in the traditional financial field. Even popular brokers like Robinhood rely on market makers to provide sufficient liquidity.
Being a market maker has undeniable advantages, and the invention of AMM in DeFi is also a game-changer. Suddenly, everyone can be a market maker. Any liquidity provided to facilitate trades reduces bid-offer spreads, reduces slippage, and earns fees for liquidity providers (LPs).
The most prominent design is the liquidity pool: it does not matter whether the LP has invested millions of dollars in the pool or only a few thousand dollars. LP participation is proportional and no one is excluded from the market. By automating the market-making process, AMMs provide a fair opportunity for all market participants.
Is Uniswap V3 courting centralized institutions?
The core function of Uniswap V3 is"Custom Liquidity"scope, allowing users to connect AMMs with traditional order books. This frees up passive capital stored on AMMs, making it easier for assets to be pooled, while helping to channel long-tail liquidity. Uniswap V3 offers greater capital efficiency along with range order books, non-fungible liquidity, and flexible fee tiers, in addition to helping low cap/batch tokens bootstrap liquidity and enabling users to convert their passive capital into active fee assets Waiting for new features.
Uniswap is the leader of DeFi. The launch of v3 is reminiscent of Silicon Valley marketing tactics. Uniswap This does draw a lot of attention to v3, but it also shows that the governance of the protocol has become centralized. The community never participated in the production of V3. No one had the opportunity to raise any legitimate concerns about the new system.
In addition, Uniswap announced that it will not redistribute any fees to UNI holders. It is also important to note that Uniswap has received significant investment from some investors in Silicon Valley. Many well-known VCs are major stakeholders in Uniswap. These investors represent a sizable portion of the UNI token, and as such, they hold the keys to the governance of one of the most valuable DeFi projects.
Veteran DeFi deviates from governance to a minimum
The latest version of Uniswap is extremely capital efficient and technically represents an incredible innovation in the AMM space. But it also raises an important question: to what extent do advances in protocol efficiency outweigh the importance of bottom-up governance, community building, and protecting the interests of ordinary users?
The v3 release of Uniswap is one of the clearest signs of this changing trend. While anyone can see the code used by Uniswap, it is now copyrighted for the next two years. Open source code has been one of the reasons for the exponential growth of DeFi, but for Uniswap, that phase is over.
Of course, the potential of Uniswap V3 is untapped. Passive, simple liquidity positions still predominate, with most positions managed in a discretionary, non-optimized manner. This gap presents an excellent opportunity for the new V3 protocol to build automated on-chain strategies that help actively manage liquid assets, thereby democratizing access to market opportunities for everyday DeFi users. These protocols are critical to the success of Uniswap itself.
