Decentralized finance (DeFi) project Uniswap’s V3 has achieved $1 billion volume in 24-hours in just a week of its launch.
In the past 24-hours, Uniswap v3 recorded $862 million in liquidity and $1.74 billion in volume. As of writing, the volume is at $916 million.
This surge in activity on Uniswap has been the result of Dogecoin-inspired meme coins such as SHIB, AKITA, and WOOF. With these coins not available on centralized exchanges, the retail crowd has been using the DEX to trade these coins.
Up until today, they all have been at the front page of Uniswap, accounting for most of the volume. Wrapped Dogecoin is now the only one left in the top 10 after Ethereum co-founder Vitalik Buterin dumped a ton of supply of these meme coins, which has been unwittingly sent to his address and sent the proceeds to the charity.
These retailers chasing the meme coins were the ones congesting the Ethereum network this time, unlike the Crypto Kitties in 2017, and sending the fees on the second-largest network and Uniswap flying.
How badly do we need Etheruem L2s?
Today @Uniswap users ALONE spent ~$42m on Ethereum gas fees.
This is almost 5x what was spent on Bitcoin network fees during the same period https://t.co/8nL6P8gRkq
— Hayden Adams 🦄 (@haydenzadams) May 12, 2021
This helped Uniswap surpass Bitcoin in daily fees. Compared to Uniswap’s nearly $9 million daily fees, Bitcoin only did almost $4 billion. The 7-day average fees for Uniswap and Bitcoin stand at $6.6 million and $5 million, respectively, as per Crypto Fees.
For four days in a row, the popular DEX has surpassed Bitcoin’s daily fees thanks to the retail’s dog meme mania.
Meanwhile, average fees on Ethereum hit a new ATH on Wednesday at $70, generating $107 million in daily fees with $65 million as the 7-day average.
Ethereum fees have gone 2x higher than the previous ATH with “increased competition for MEV should push fees even higher,” noted Lucas Nuzzi from Coin Metrics.
According to him, SHIB was the driver of this spike, but MEV had a clear role in pushing fees higher. MEV increases fees because bots are willing to pay higher fees to extract value and out-of-band payments decrease the certainty of what a “sufficient” gas price should be, leading to overpaying.
EIP-1559 that is coming with the London hard fork in July is expected to normalize some of this volatility.