Uniswap Is Not DeFi, It’s Not Decentralized – Ripple CTO
David Schwartz, the Chief Technology Officer (CTO) of the cryptocurrency firm, Ripple has come out to say that Uniswap, a decentralized exchange (DEX) built on Ethereum network is not decentralized finance (DeFi) neither is it decentralized. The CTO had given a reason for his claim saying that the DEX is subject to the control of its creators, UniSwap Labs. UniSwap is a decentralized finance protocol that offers liquidity provision services to liquidity providers (LPs). They also offer staking and lending services to users via staking pools and flash loans. The DEX is currently the largest decentralized exchange and the fourth-largest cryptocurrency exchange. The DEX was created by Hayden Adams.
UniSwap launched its version 3.0 (V3) in late March with improved functionalities for traders, liquidity providers and developers. Other novel features on the DEX include concentrated liquidity, active liquidity, capital efficiency, flexible fees, etc. The release of UniSwap V3 in late May was met with so many positive reactions. The DEX is an automated market maker (AMM) that makes use of smart contracts to execute transactions unlike centralized exchanges. Before the release of V3, the DEX had exceeded over $10 billion trading volume weekly beating other DEXs like PancakeSwap. DeFi deploys the current financial system into the blockchain out of the reach of banks and provides a way for people to earn via staking, liquidity mining and lending without the need for a collateral.
UniSwap Partners with Team Secret to Reach More Users
At the beginning of June, UniSwap partnered with Team Secret, a professional Dota 2 team, to reach more users. The partnership is centred on developing eSports activation in order to widen its reach and attract more audiences to the DeFi protocol. UniSwap DEX is also regarded as an Ethereum killer. The first two versions of the DeFi protocol were built on open source code. However, the latest version of the code was built with a source license to prevent its duplication on another DEX.
SushiSwap decentralized exchange had a similar interface with UniSwap’s because it adopted the open source code of UniSwap V2. UniSwap Labs is funded by powerful institutional investors such as Andreessen Horowitz, Paradigm Venture Capital, Union Square Ventures LLC and ParaFi. The DEX had faced a hacking issue in 2020 which prompted it to be shut down temporarily.
Ripple’s CTO Explains Reason for Claim
David Schwartz had maintained that the UniSwap DEX is not DeFi in a recent tweet, saying if an exchange has the right to dictate to others how they can and cannot use the exchange, then it is definitely centralized. He had further said that UniSwap Labs was in charge of the use of the DEX just like a centralized exchange, as such it cannot be a DEX. He said they get to decide where it runs which means control. The CTO bragged that he had set up the foremost DEX in 2012 on Ripple Ledger alongside Ripple’s co-founder, Arthur Britto.
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