Connect with us

Altcoins

Uniswap: Daily active users are on rise but UNI is down, decoding why

Published

on

Source: Unsplash

Uniswap has had a torrid month during August, to say the least. Despite being the leading DEX in the industry, the protocol’s UNI token has continued to slide.

UNI, at press time, was trading at $7.01 after losing 17% in the past week.

One of the primary reasons for the drop is the loss in activity coming on the back of increasing market tensions.

However, more recently there has been an uptick in the number of daily active users on Uniswap.

In comparison to Lido Finance and Aave, Uniswap still continues to lead the DeFi market.

The number of active users has doubled from over 17,000 in early July to 34,000 at the time of writing. Messari asserted that “Uniswap’s treasury value increase is likely due to the vesting schedule imposed on the UNI token”.

What else is happening?

Uniswap recently attracted the attention of the crypto community after it revealed that 253 accounts on its front end were blocked in sanction compliance.

This came on the back of U.S. government sanctions on Tornado Cash earlier this month. Uniswap has partnered with TRM Labs to screen and monitor suspicious financial activities, including those related to mixing service Tornado Cash, as per Yahoo Finance. Uniswap said in a recent post,

“We intend to only block wallets that are owned or associated with clearly illegal behavior like: sanctions, terrorism financing, hacked or stolen funds, ransomware, human trafficking, and child sexual abuse material.”

Data-dive

The situation surrounding the UNI continues to look ugly in these market conditions. It is likely to struggle during Q3 in the present market. Currently, some respite has been restored in UNI as it rushes for an uptick on the daily charts.

More so, the profitability of trading UNI has fallen down rapidly after the latest dip.

At present, the MVRV ratio (30d) stands at a staggering -38.02% putting many investors at losses.

This has come as an untimely stat update for the protocol as it struggles to cope up with falling crypto asset demand in the DEX category.

Source: Santiment

Moreover, Uniswap has also been a victim of social engagements in recent weeks.

Despite striking gold in the social volume chart towards the end of July, the metric has remained underwhelming throughout August.

Source: Santiment

To conclude, the near-term conditions continue to prove to be severe for Uniswap as it struggles for momentum.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.


Please select your Email Preferences.

Kanav is a journalist at AMBCrypto. He has a Masters in Media and International Conflict and is interested in areas of digital society, crypto developments in the political sphere and the socio-cultural impact of a crypto-society.

Click to comment

Leave a Reply

Your email address will not be published.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.