Uniswap, the largest decentralized cryptocurrency exchange in the world, is currently earning more in user fees than Ethereum, the blockchain on which it was first launched.
According to data aggregator Crypto Fees, during the past seven days, Uniswap’s average total user fees increased to roughly $4.1 million, exceeding Ethereum’s $3.9 million. With thousands of projects, including Uniswap, using its blockchain and paying so-called gas fees to complete transactions, Ethereum has historically generated more revenue. To put this into context, data from Crypto Fees reveals that on Jan. 1, Ethereum earned roughly 10 times more fees than Uniswap.
The current milestone, according to Arca analyst Katie Talati, was brought about by quickly increasing volatility, which significantly increased trade volumes.
Layer-2 solutions are growing in popularity due to their low fees, while Ethereum has seen a sizable fall in user activity during this time. Uniswap v3 contracts were introduced to Polygon in December 2021. Prior to it, Arbitrum also introduced the decentralized exchange.
The overall trading volume on Uniswap reached $1 trillion last month. Over the previous 24 hours, the exchange recorded trades worth $1.22 billion. The automated market maker, which was introduced in 2018, rose to prominence in mid-2020 during the height of the decentralized financial boom.
The trading platform has received a lot of condemnation for enabling the spread of fraudulent tokens. A North Carolina individual filed a class action complaint against Uniswap and its venture capital supporters in April, accusing them of “rampant fraud.”
Depositors cannot withdraw their frozen Ether until Ethereum undergoes yet another software upgrade, potentially next year. As a result, some risk-takers may find it more enticing to become a liquidity supplier on Uniswap than to stake on Ethereum for the time being.
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