Why Uniswap (UNI) token surged to a new all-time high of $15 plus

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As daily volume on the DEX soars and investors expect the introduction of new governance privileges, Uniswap’s governance token has notched a new all-time high above $15.

The decentralized exchange of Uniswap has emerged as one of the core components of the decentralized finance market, with the DEX benefiting from the first-mover advantage since being the go-to exchange for new ventures and traders in 2020.

 

At the end of 2020, 400 UNI tokens were allocated to all wallet addresses that had previously provided liquidity on the site at the height of $3,500 north of the impromptu airdrop.

The DeFi demand has sold dramatically by late October 2020, and for weeks this pinned UNI price below the $4.00 mark, but since the beginning of 2021, UNI token has gained 335 percent and hit a new all-time high at $15.35 on Jan. 27.

At the moment, the driving forces behind the rise in the UNI price are an increase in the daily amount transacted on the network, a locked increase in the overall value of the platform, and the introduction of governance features as the Uniswap v3 launch approaches.

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UNI/USDT 4-hour chart. Source: TradingView

Total value locked continues to rise

One of the key measures used to assess its validity and how the group is involved is the monitoring of the overall locked value (TVL) of a DeFi protocol.

A rising TVL implies that the platform’s customers trust the platform enough to invest their funds to gain prizes, usually meaning that the liquidity pools are more competitive in the market than other exchanges.

A new all-time high TVL of $3.16 billion was recently created by the Uniswap network on Jan. 24, and this was helped by a rise in the price of many of the top cryptocurrencies as well as common DeFi tokens.

In terms of TVL, Uniswap is now the top-ranked DEX and ranks fourth as Creator (MKR), AAVE and Compound (COMP) lead in this sector when it comes to lending the network.

 

Total value locked in Uniswap. Source: Defi Pulse

Uniswap’s trading volume competes with the top centralized exchanges

The sharp spike in trading volume on the exchange is a second driver of UNI’s recent surge.

Uniswap data reveals the daily value of the DEX has been steadily above $400 million since the beginning of 2021, and on January 11, the metric soared to a record peak at $1.3 billion. This degree of scale now puts Uniswap in line with some of the largest crypto-currency centralized exchanges.

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Uniswap’s transactions still outweigh those of its immediate rivals, and Dune Analytics data reveals that Kyber Network and IDEX were the biggest competitors in early 2019.

Uniswap 24-hour volume. Source: Uniswap

 

Monthly DEX volume. Source: Dune Analytics

The number of DEXs has continued to grow since that time, but Uniswap had established itself as the preferred option for traders by March 2020 and remained the dominant DEX until 2021.

Excitement surrounding the v3 rollout bolsters UNI price

Although many airdrop recipients were willing to sell their tokens soon after receiving them, with the inclusion of governance functionality, those who choose to hang on to them now have the potential to gain additional advantages.

The Uniswap Treasury already has $500 million in it and Uniswap founder Hayden Adams recently asked the group “what are some of the most impactful ways in which this UNI can be allocated by governance?” ”

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As the list of delegates for the Uniswap platform continues to expand, demand for the UNI token is expected to increase as more UNI for governance purposes are locked on the platform.

Excitement over the forthcoming Uniswap v3.0 continues to grow and alternatives to the high gas fees and changes to the impermanent loss system are planned in addition to new governance functionality.

 

-cointelegraph

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