Throughout the course of 2023, Uniswap, the prominent decentralized exchange, has consistently outperformed Coinbase, the leading U.S. cryptocurrency exchange, in terms of spot trading volume.
Newly disclosed data from Bitwise researcher Ryan Rasmussen reveals that in the second quarter alone, Uniswap successfully executed trades valued at approximately $110 billion, a notable leap compared to Coinbase’s tally of around $90 billion.
The ascendancy of Uniswap’s quarterly spot volume over Coinbase’s materialized in the first quarter, as the two exchanges facilitated trades worth roughly $155 billion and $145 billion respectively.
Coinbase grappled with a more pronounced erosion in spot trading activity during the bearish market period, experiencing an 83% downturn from its Q4 2021 standing of approximately $540 billion. Simultaneously, Uniswap’s volume underwent a 50% contraction, dwindling from $235 billion over the same span.
These statistics underscore the steadfastness of established decentralized protocols in the face of the prolonged cryptocurrency downtrend.
The bear market of 2022 exacted substantial tolls on centralized cryptocurrency entities, causing exchanges, lenders, and venture capital firms to hemorrhage billions of dollars in customer assets. This turmoil further fortified the argument for decentralized protocols functioning in adherence to algorithmic rules, rather than the capriciousness of human agency.
Despite the surge in trading volume this year, the UNI token has registered a 10% decline in 2023. Presently, UNI languishes at 90% below its peak valuation in May 2021.
The Emergence of V4 and UniswapX
Notably, Uniswap is in the process of expanding its market influence with innovative offerings.
In the month of June, Uniswap unveiled the codebase for its upcoming iteration, denoted as v4. This advanced protocol will encompass features such as limit orders, automated compounding of fee revenues for liquidity providers, and customizable plugins. Furthermore, Uniswap v4 pools will have the capability to function as time-weighted average market makers (TWAMMs), thus enabling traders to execute sizable orders gradually.
Anticipated to launch after Ethereum’s impending major upgrade, Dencun, Uniswap Labs intends to roll out the v4 upgrade.
Another significant stride occurred with the introduction of Uniswap’s DEX aggregation protocol, UniswapX, just last month. This protocol empowers third-party entities acting as market makers to vie for order flow by presenting the most favorable prices to traders. Moreover, Uniswap asserted that the protocol furnishes safeguards against Maximal Extractable Value. Currently, UniswapX is accessible in beta mode for users who choose to opt in.
