Uniswap: Here is how the leading DEX was impacted by the collapse of FTX
- Following FTX’s collapse on 7 November, Uniswap saw an increase in user activity.
- Its daily new transacting wallets rallied to a 2022 high of 55,550 wallets.
- Uniswap V2 and V3 saw increased ETH transactions.
Leading decentralized crypto trading protocol Uniswap [UNI], in a tweet on 14 November, confirmed that new users on its web application reached a 2022 all-time high of 55,550 daily new transacting wallets.
The sudden spike in transacting activity on the decentralized exchange in the last week was attributable to the collapse of FTX and the resulting FUD and general distrust in centralized exchanges that ravaged the cryptocurrency market.
According to analyst WuBlockchain, in the last seven days, trading volume surged on Uniswap as Uniswap V2 and V3 burned more than 2300 Ethereum [ETH]. This was due to the “loss of trust in CEX,” WuBlockchain said.
Increased ETH burning in the last week due to market volatility caused by the collapse of the cryptocurrency exchange FTX led ETH to become deflationary for the first time since the Merge.
At press time, Ether’s net issuance, or the annualized inflation rate, stood at 0.029%, data from ultrasound.money showed.
In addition to contributing to the amount of ETH burned in the last week, Alex Svanevik, CEO of on-chain analytics platform Nansen, in a tweet, confirmed that ETH trading volume on Uniswap exceeded that of any centralized exchange between 13 and 14 November.
Uniswap has more volume on ETH than any centralized exchange last 24 hours?
Only one above $1B. pic.twitter.com/JEXncWlDLw
— Alex Svanevik ? (@ASvanevik) November 14, 2022
There is a catch
In addition to a surge in ETH trading on these versions of Uniswap, data from Dune Analytics revealed a spike in MEV robotics activity on Uniswap V3 in the last seven days. As of this writing, the average daily total volume for MEV bot activity sat at $1,256,263,553.
However, while Uniswap saw increased activity as a result of the collapse of FTX, data from DefiLlama showed a reduction in the protocol’s TVL since 7 November. At press time, the TVL on Uniswap was $3.81 billion. It declined by 13.4% since FTX collapsed.
Of its three versions, Uniswap V3 suffered the most drop in TVL within the period under review. As per data from DefiLlama, its TVL fell by 12% since FTX collapsed. At press time, TVL on Uniswap V3 was $2.84 billion.
UNI-fied in decline
UNI, Uniswap’s native token, did not escape the blow dealt to major cryptocurrency assets as a result of the collapse of FTX. Per data from CoinMarketCap, its price has since fallen by 17%.
According to the on-chain analytics platform Santiment, the majority of UNI holders held at a loss, at press time. Its MVRV ratio was negative 55.67%. Lastly, negative sentiment trailed the token as it posted a weighted sentiment of -0.53.