The popular DeFi protocol Uniswap is reaching towards becoming the fourth largest DeFi project to hit the $1 billion mark.
Given that the fully decentralized on-chain protocol for a token exchange on Ethereum has seen a growth of 225% in the past less than five days, it won’t be long before it enters the billion-dollar category.
This decentralized exchange, which has no native token, hit $502.89 million in volume on Sunday, surpassing the volume of the popular centralized exchange Coinbase Pro, for the first time.
Now, for the second day in a row, Uniswap recorded just over $467 million volume in the past 24 hours while its liquidity has already gone above $1 billion, up from just $306 billion on August 27th.
Meanwhile, in the last 24 hours, Coinbase Pro recorded $416 million in volume, Kraken $193 million, Bitfinex $139 million, Bittrex $53 million, Poloniex $43 million, Gemini $23.1 million, and Binance.US $23 million, as per CoinGecko.
Uniswap already sees more usage than many of the popular centralized cryptocurrency exchanges, except for the likes of Binance, OKEx, and Huobi, which is managing between $2 to $4 billion in daily trading volume.
The biggest contributors to Uniswap’s volume are Wrapped Ether (ETH), USDT, USDC, DAI, YFI, SUSHI, LINK, Synth sUSD, SNX, and AMPL.
Software eats the world,
Platforms eat software,
Protocols eat platforms. https://t.co/QeltdnRPx1
— CZ Binance (@cz_binance) August 31, 2020
However, the issue here is the DEX Sushi, which has nearly $760 million locked in it and proposes to be an evolution to the Uniswap protocol. “For users, it’s value-destroying. Just causes liquidity fragmentation. You could still use an aggregator, but at a min, your gas costs will go up,” noted analyst Ceteris Paribus.
For now, the protocol is creating more liquidity, as seen in the 226% growth in just four days, but it also means that once the migration of Sushi from Uniswap happens, rewards will get a huge haircut, so it is a net negative, he said.
However, the DeFi ecosystem continues to grow, having locked in $7.7 billion in the sector, and not all the projects are included yet.
Volume on DEX, overall, has been growing, unperturbed by the high Ethereum gas price, which, although recently trended down, saw a spike this weekend.
August has actually been yet another record-breaking month for DEX volumes that reached $10.42 billion, compared to just $4.3 billion in July as per Dune Analytics. And Uniswap and Curve have been leading this growth, accounting for more than 65% and 18% of overall volumes. Uniswap also accounts for 57% of all DeFi users.
It looks like the next flippening will be of DEX vs. CEX tokens.