31 Aug 2020 Jane Whitmoore
Uniswap Surpasses Coinbase In Trading Volumes Amid SushiSwap Popularity Surge
The frenzy about DeFi skyrocketed Uniswap, a fully decentralized liquidity protocol, with daily trading volumes reaching record levels. Uniswap‘s creator, Hayden Adams, noted that one of the leading crypto exchanges to date, Coinbase, was 20% lower in terms of 24h trading volumes than those of Uniswap. As of press time, the DeFi protocol reached $472,668,364 in trading volumes and $1.16 billion in liquidity.
Source: Uniswap
Looking at Uniswap`s liquidity, Wrapped Ethereum tokens reached $555.94 million, accounting for around 48% of the total Uniswap liquidity. Second in the list is Tether (USDT) with $77,952,419 while USDC closing the top-three with $73,763,911 in liquidity. The top-ten list includes projects like DAI, yearn.finance, SushiToken, Chainlink (LINK), Synth sUSD, Ampleforth (AMPL), and Synthetix Network.
Source: Uniswap
The Uniswap protocol enables users to make token swaps or provide liquidity to pools in exchange for a share of the 0.3% fee that Uniswap charges for a given transaction. However, some users blamed the recent DeFi surge to have increased network fees to ridiculously high levels, making small transactions unfeasible. Users also noted that only whales can accumulated gains using DeFi in the current situation.
Meanwhile, one of the primary reasons behind Uniswap’s surge is the dramatic increase in popularity of SushiSwap, which is a fork of the original Uniswap protocol, but offering greater liquidity provider rewards.
Interestingly, SushiSwap made a drastic surge, reaching 72% of Uniswap’s liquidity. SushiSwap is claimed to be designed as an "evolution" of Uniswap. The differences betweeh Sushiswap and Uniswap is the governance token called SUSHI. Uniswap, on the other hand, does not have their own token, but they plan to launch such with the release of v3 protocol.
SushiSwap is similar to Uniswap, as their forked protocol also offers SUSHI tokens, which help liquidity providers to continue receiving a share of SushiSwap’s liquidity. As opposed to Uniswap, where the 0.3% fee would be proportionally distributed among liquidity providers, SushiSwap is giving 0.25% directly to active providers, while the rest 0,05% would be distributed to SUSHI token holders.
However, some crypto experts are seeing big issues in SushiSwap’s behavior. For example, Will Warren, co-founder of decentralized exchange protocol 0x, noted that it would be "terrible" if SushiSwap continues its liquidity spree.
"It's in the Ethereum community's best interest to reward builders. That said, forking liquidity would only result in worse swap prices for people that go directly to a single source rather than an aggregator", Warren stated.
As of press time, the price per SUSHI token reached $3.95 on CoinMarketCap.
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