Uniswap Revenue Flies To All-Time Highs: Is UNI Undervalued?

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As a seasoned analyst with over two decades of experience in traditional finance and blockchain markets, I find myself intrigued by the current state of UNI, the native token of Uniswap. While it’s undeniable that the token has taken a beating, down 85% from its 2021 peaks, I believe there are reasons to remain optimistic.

The digital currency UNI, which is used on the popular decentralized exchange Uniswap, is currently experiencing significant selling activity. On the daily chart of UNI versus USDT, the token has dropped by approximately 62% from its peak in March. However, over the past few weeks, the price has shown some signs of leveling off.

The chart data indicates an approximately 35% increase since the August lows, suggesting a strong absorption of selling pressure.

UNI Is Down But Uniswap Generates $50 Million In Revenue So Far

Despite UNI currently being significantly below its all-time highs, having dropped by approximately 85% from its 2021 peaks, there are several promising advancements that could potentially boost prices in the future. Data from Token Terminal on August 25 indicates that the DEX has already accumulated a revenue of $50 million.

Uniswap facilitates the exchange of tokens across numerous digital platforms and blockchains without requiring trust. It initially went live on Ethereum in November 2018, but later expanded its reach to BNB Chain and Ethereum’s layer-2 solutions such as Arbitrum and Optimism.

Instead of Binance, where users require custodial wallets for transactions, Uniswap necessitates just a non-custodial wallet for connection and swapping. The trades here are not facilitated by intermediaries but rather through smart contracts. Moreover, Uniswap offers access to a wider variety of tokens, some of which aren’t accessible on leading centralized exchanges like Binance.

Uniswap’s benefits have led to an impressive growth in assets managed, currently standing at around $4.73 billion, as reported by DeFiLlama. As of August 26, Uniswap can be found on more than ten different platforms, but a significant portion, approximately $3.8 billion, is being managed on Ethereum.

Aggregately, DeFiLlama’s data shows that a total of $2.3 billion in fees have been accrued so far. These fees are primarily from swap transactions on Ethereum and other platforms. In the last 24 hours alone, Uniswap has yielded over $854,000 in fees.

Is The Future Bright, Developers Prepare For V4

As cryptocurrency values increase, it’s quite probable that DeFi activity will surge as well. Since the market recovery from mid-October 2023 to March 2024, the total value locked (TVL) in DeFi more than doubled, indicating growing enthusiasm and trust among the community. According to DeFiLlama, by March 2024, the total value locked across all networks reached approximately $106 billion, up from around $40 billion in October.

As the total value locked (TVL) in Decentralized Finance (DeFi) grows, Uniswap will facilitate more trades, leading to higher transaction fees. Additionally, with enhancements to its protocol, Uniswap is likely to become a preferred platform for these transactions.

Recently, Uniswap Labs unveiled a $2.35 million incentive fund for developers, offering rewards to those who discover and rectify potential issues in Uniswap v4 before its launch. This upcoming version of the decentralized exchange will bring fresh features like custom oracles and Hooks, enhancing its flexibility even further.

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2024-08-27 08:46