Uniswap’s TVL Slips Down 57%, While Rivals Boost Yield Rewards

One of the largest DeFi yield farming protocols, Uniswap, recently suffered from a drastic decrease in the amount of collateral that is locked in the protocol, or total value locked (TVL). The drop in TVL comes after Uniswap ceasing its yield farming program. 

Immediately after the cease, rival automated market maker protocols like 1inch, SushiSwap, and Bancor, aimed to lure liquidity providers with targeted rewards. On November 17, when Uniswap’s farming incentive ended, the notorious SushiSwap protocol announced that the protocol would support liquidity mining for four market pairs, which were previously run by Uniswap. 

Also on November 17, the TVL of Uniswap took a sharp dive, losing over $1 billion in collateral in less than 24 hours. Furthermore, Uniswap’s TVL slipped 57% from its 14^th November all-time high of $3.07 billion, to reach values of $1.29 billion as of press time. 

Source: DeFi Pulse

By contrast, SushiSwap saw a massive TVL boost, marking a tri-fold increase in its total value locked over the past week, with 161% of the gains coming directly after Uniswap’s yield farming incentives shutdown. With a TVL of $1.03 billion, which puts Uniswap’s fifth place in the DeFi ranks at stake. 

However, SushiSwap was not the only DeFi protocol to receive a welcoming boost after the cease of Uniswap’s liquidity farming incentives. Bancor, for example, launched a “vampire attack” campaign, aimed at sucking out the free-roaming liquidity providers with a liquidity mining program, including retroactive rewards.

DEX aggregator 1inch, on the other hand, launched the second stage of its yield farming. 1inch noted that the DEX would allocate a further 1% of its token supply to liquidity providers. Sergej Kunz, 1inch’s CEO, said that “right now we’re seeing a lot of other projects launching incentives after Uniswap’s ended.”

“As we are confident that our Mooniswap protocol has a lot of potentials to be unlocked while attracting additional liquidity, we decided to announce our new liquidity mining program in order to hunt for the freed-up liquidity from the Uniswap,” Kunz added.

Automated market makers (АMМ) provide liquidity to the market using different types of pools. The DeFi craze came when in addition to providing liquidity, many DEXs started attracting users by offering yield-farming rewards as well. Blockchain-based streaming platform Audius even plans to reinstate exchange liquidity mining program, which they previously had in place, but this time the rewards will be cut in half. For this purpose, they submitted a Uniswap governance proposal on Tuesday, 17th November.