Recently, as the price of Ethereum (ETH) has been continuously rising in the market, the entire ETH ecosystem has witnessed a development boom. Data shows that over the past month, the price of ETH has soared by 48%, and the prices of many ETH ecosystem projects have also risen accordingly. Among them, as one of the blue-chip stocks that Trend Research focuses on in the ETH ecosystem Portfolio, Uniswap (UNI) has performed remarkably. Its price has risen by 28% in the past month. Under the current continuous market trend, it is considered to have the momentum for catch-up growth. In addition, UNI is not only affected by the fluctuations in the ETH market, but also has potential advantages in its own field, such as the expectation of easing macro regulation, leading business data, and the structural increase in token prices.
The transformation of the macro regulatory environment has sent out positive signals
Looking back on the development process of UNI at the regulatory level, it has gone through several key stages. During the regulatory ambiguity period from 2021 to 2023, the U.S. Securities and Exchange Commission (SEC) launched an investigation into Uniswap Labs on September 3, 2021, focusing on its marketing model and investor services. SEC Chair Gary Gensler has repeatedly emphasized that decentralized finance (DeFi) platforms may be subject to securities regulations, highlighting the necessity of strengthened supervision. This investigation has drawn widespread attention from the industry. Whether governance tokens such as UNI fall under the category of securities has become a core point of contention in the field of crypto regulation. However, on August 30, 2023, Uniswap won a class-action lawsuit. The court dismissed the relevant accusations, determining that the Uniswap protocol was mainly used for legal transactions and lacked sufficient evidence to support the plaintiff’s claims regarding securities.
From 2023 to 2024, it entered a period of regulatory pressure. On April 10, 2024, the SEC issued a Wales notice to Uniswap Labs, accusing the Uniswap protocol of possibly operating on an unregistered stock exchange and that its interface and wallet might involve unregistered securities brokerage business. UNI tokens and liquidity provider tokens have also been questioned as potentially constituting investment contracts. Facing the accusations, Uniswap Labs submitted a 40-page response document on May 22nd, clearly stating that the protocol belongs to a general technology platform, is not specifically designed for securities trading, and 65% of the transactions involve non-securities assets. At the same time, it is emphasized that the SEC needs to redefine the concepts of “exchange” and “broker” in order to implement effective supervision, and it is pointed out that the SEC’s classification of tokens is incorrect.
Entering 2025, the regulatory environment will undergo significant changes and enter a period of relaxation. On February 25th, the SEC announced the termination of the investigation into Uniswap Labs and no longer took enforcement actions. Uniswap Labs promptly announced this news on the social platform X, calling it a “major victory in DeFi” and fully affirping the legitimacy of its own technology. Behind this incident lies a clear shift in the SEC’s attitude towards crypto regulation since the Trump administration took office.
Since then, on April 8th, the SEC invited enterprises such as Uniswap Labs and Coinbase to participate in the crypto roundtable meeting to jointly discuss the regulatory issues of crypto transactions. On May 5th, several Republican members of the House Financial Services Committee and the Agriculture Committee jointly released a new discussion draft on the regulation of the crypto industry, detailing and expanding the regulatory framework for digital assets. It clearly states that the sales and transactions of digital commodities under specific conditions do not constitute securities.
According to the plan, the House of Representatives will release the updated text of the House of Representatives Digital Asset Market Structure Bill on May 29. This bill follows the content of the previous discussion draft and is regarded as an important cornerstone for the future regulation and trading of digital assets in the United States. It will be reviewed on June 10.
From the SEC’s termination of the investigation at the beginning of the year to the current clear definition of securities in the bill, UNI has escaped the risk of prosecution at the token economics level. With the further planning and adjustment of crypto regulation by the Trump administration, Uniswap Labs actively participates in it and may enjoy more regulatory benefits in the future.
The business performance is outstanding and the development prospects are promising
Uniswap, as the earliest and largest decentralized exchange (Dex) protocol in the crypto market, has performed exceptionally well in business data. Currently, its total locked value (TVL) has reached 5.12 billion US dollars, and its transaction volume in the past 30 days has reached as high as 84.5 billion US dollars, second only to Pancake among similar platforms. Before the launch of the Binance Alpha feature, Uniswap’s trading volume had long ranked first in the entire market. Furthermore, the agreement generated revenue of 929 million US dollars in a year, ranking seventh in the industry. If calculated by the traditional price-earnings ratio (P/E) valuation method, its P/E value is within the range of 4.5-6.4. In contrast, Coinbase’s P/E is approximately 33-42, Apple’s is about 28-35, and Tesla’s is approximately 50-70. If the “fee switch” can be turned on in the future or if the financial application scenarios are expanded due to the relaxation of regulations (currently holding UNI cannot participate in profit distribution), from the perspective of business profitability, its current market value is significantly underestimated.
According to the Uniswap Foundation’s financial summary for the first quarter of 2025, as of March 31, the foundation held $53.4 million worth of US dollars and stablecoins, 15.8 million UNI (denominated in UNI), and 257 ETH. Converted at the closing exchange rate on May 28, The total value of the tokens is approximately 150 million US dollars. It is expected that the capital turnover period will last until January 2027, and the overall financial situation is good.
In terms of empowering the token economy, Uniswap Labs continues to explore and innovate. In the past, the ways UNI generated returns mainly included adding to specific trading pools to become a liquidity provider (LP), staking to participate in the governance of decentralized autonomous organizations (DAO) to propose buybacks or liquidity incentives, etc. However, the returns from these methods were indirect and generally low, and it was difficult to obtain direct returns by directly holding UNI. This is also an important reason why the price of UNI has been long-term restricted.
For this reason, Uniswap Labs has repeatedly proposed the “fee switch” proposal. Affected by regulatory risks, it has not been substantially advanced before. The latest proposal was relaunched in February 2024 and passed a technical vote in May. It is expected that on-chain voting will be further carried out in the second half of 2025. With the gradual improvement of the regulatory framework, the “fee switch” is expected to be successfully activated in the future.
In addition, Uniswap’s newly launched Unichain has opened up brand-new application scenarios for UNI. Unichain is the Layer 2 blockchain announced by Uniswap Labs on October 10, 2024, which is built based on the Superchain framework of Optimism’s OP Stack. And it will be officially launched on the mainnet on February 13, 2025. Hayden Adams, the CEO of Uniswap Labs, said that Unichain can offer the speed and cost advantages of Layer 2, achieve better cross-chain liquidity access, and enhance the degree of decentralization at the same time.
Similar to other Layer 2, Unichain has a validator network and uses UNI as the staking token. Node operators need to stake UNI on the Ethereum mainnet to have a chance to become validators. The staking amount determines the probability of being selected for the active validator set. The revenue comes from 65% of the net chain income (including base fees, priority fees, and miner withdrawable value MEV), and is distributed according to the staking weight. Although the specific staking scale has not been officially announced yet, with Uniswap Labs’ continuous support for Unichain, if the yield rate increases and the ecosystem scale continues to expand, it is expected to attract more UNI to participate in staking to obtain profits.
The token market is active, and the potential for catch-up growth is prominent
Currently, the market capitalization of UNI in circulation has reached 4.2 billion US dollars, with a fully diluted valuation (FDV) of 6.7 billion US dollars. The token has achieved full circulation, and the staking lock-up ratio is approximately 37%. The contract open interest is 448 million, and the ratio of open interest to tradable market value (OI/MC) is approximately 10.6%. From the perspective of the long-short ratio data, the aggregated long-short ratio is 1.02, the long-short ratio of Binance accounts reaches 2.16, and the long-short ratio of large accounts’ positions is as high as 3.87, indicating that large investors dominate in terms of long positions. Since ETH began its upward trend, the holding volume of UNI has also been gradually increasing, and the trading activity in the derivatives market has significantly improved.
From the analysis of the spot price trend, during the period when ETH rose in November last year, the price pattern of UNI was similar to that of ETH, but the price volatility of UNI was about 2 to 3 times that of ETH. In the current April ETH rally, although the two trends were similar, the increase of ETH exceeded that of UNI. Therefore, if the current market situation continues, the market generally believes that UNI has further room for catch-up growth.
To sum up, since Trump was elected President of the United States in 2025, the regulation and integration of the crypto industry have become a hot topic. As the largest Dex protocol in the crypto market, the regulatory direction of UNI will provide important references for the entire industry. Currently, Uniswap Labs actively participates in the formulation of regulatory rules. Coupled with the multiplier effect of ETH, UNI is expected to enjoy structural benefits. Its own business performance is outstanding and its financial situation is stable. With the advancement of the Unichain project and the potential implementation of the “fee switch” proposal, it will bring new value empowerment to the token. For investors who are optimistic about the future development of the crypto market, UNI, as a blue-chip stock in the ETH ecosystem, deserves close attention.
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