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The dates of May 19th and 20th, 2021, may be recalled fondly in the future. A calamitous drop saw double-digit losses throughout, followed by a significant rebound the next day. Although the market’s emphasis is mostly focused on price success, it is also vital to maintain some perspective on the broader growth of numerous projects.
Following its initial launch on May 5, Uniswap, in particular, has collected considerable data.
Uniswap v3: The DEX to lead the charge?
The Uniswap V3 protocol went live on May 5th. Most, however, thought its debut was underwhelming. The UNI token, for example, did not see any good change on the maps. Surprisingly, after just two weeks of operation, Uniswap is finally beginning to make a difference among top DEXs.
According to data, Uniswap V3 is already the 2nd largest DEX in terms of weekly volumes next to its V2 chain. The likes of SushiSwap, Curve, and Balancer have been ousted over the same period of time, and the impressive stat is that capital inflows in V3 are a fraction, when compared to the other DEXs. It was suggested,
“Yesterday, Uniswap V3 reached 81% of the volume as Uniswap V2. This is all without liquidity incentives, passive LP managers, or even its soon to come layer-2 deployment.”
V3’s efficiency can allow new capital efficiency in DeFi, and regardless of market crashes, DEXs have been extremely functional.
During the price drop, the majority of consolidated exchanges, including Coinbase, Binance, and Gemini, went offline for a period of time, but the DEXs stayed operational.
Now, Uniswap V3’s early success is only reflective of the fact that DEXs will begin to consume more transactional volumes in the future, and Uniswap’s current success will enable other ventures to thrive as well.
SushiSwap and Balancer, for example, are launching next-generation AMMs in the coming months, and their alternative solution to resource efficiency would be scrutinised as well.
Uniswap’s V3 is laying down the foundation
Although the time-length for price inflation, i.e. UNI token, has yet to be discovered, V3 will activate the ability of other DEXs as well because it is theoretically demonstrating how liquidity can be increased for DEXs. Uniswap’s inherent function of Concentrated Liquidity can minimise slippage and provide traders with stronger rates during trading sessions.
Innovation on its website will have major ramifications for other emerging DEXs, and the collective ecosystem of decentralised exchanges could see increased development in the near future.