By Hassan Mehmood (Saudi Arabia)
Decentralized exchange Uniswap witnessed $15.3 billion in September alone, new data says. It has also left behind Coinbase in daily trading volume.
According to data published by Dune Analytics, the total traded volume over Uniswap reached $15.371 billion, while centralized exchange Coinbase processed only $13.6 billion.
Major Factors Behind Uniswap’s Growth
There are many things that have pushed DEXs volume high. But there are two major things which are like the driving forces of volume over the platform. The increasing interest of investors in decentralized finance has made significant progress, which leads to an exponential surge in activity over decentralized exchanges. Second, the governance tokens, such as the UNI token, have attracted unlimited investors and traders. The growth of UNI token has led to the growth of Uniswap.
A governance token comes into existence as a result of staking different cryptocurrencies, and the most common cryptocurrency is Ethereum (ETH). These tokens are then handed over to users by the DeFi protocols. Only those individuals are eligible to get governance tokens who stake cryptocurrencies. After users receive tokens in a decentralized manner, they store them until a centralized exchange announces the trading of the tokens. But most of the time, centralized exchanges cannot list those tokens, which are smaller in market cap. Sometimes, they do not list as these projects are not according to the requirements of the exchange.
Also read:Here comes Uniswap that accepts and lists all governance tokens over its platform. That’s why the total value locked in DeFi has reached billions of dollars.
Governance tokens started their victorious journey in June when a token known as COMP witnessed rapid growth.
DeFi Tokens are in a Weak Position
Over the last few weeks, the price value of various DeFi tokens dropped, but the trading volume of Uniswap and other decentralized exchange did not affect. According to the researchers at Dune Analytics, the trading volume of DEX reached a total of $24 billion in September alone.
On August 30, Uniswap first time exceeded Coinbase Pro in daily trading volume. Uniswap announced at that time it had processed $426 million while Coinbase had witnessed only $348 million in 24-hours.
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