Uniswap’s record activity meets slower fee growth – What does it mean for UNI?

Uniswap’s record-breaking streak is gathering pace rather than cooling off. Weekly swaps surged 86% to 40 million as more users entered the protocol.

The milestone surpassed Uniswap’s previous record, established one week earlier.

This rapid growth showed increasing demand for Uniswap’s [UNI] infrastructure rather than an isolated burst of trading.

Unique Daily Swappers also reached approximately 147,000. Therefore, broader participation accompanied the rising number of transactions.

Notably, V3 still processes most swaps. However, V4’s growing contribution suggests users are adopting newer infrastructure.

Meanwhile, activity across Ethereum [ETH], Base, Arbitrum [ARB], and newer deployments indicates that Uniswap’s usage is becoming less dependent on a single network.

Uniswap activity drives higher fees

The large increase in trading volume on Uniswap has led to more trades and higher associated fees. Simply, this shows that users have taken advantage of its increased usage by way of increasing the overall economic strength of the protocol.

Cumulative Fees paid to the Uniswap protocol rose from approximately $17 million in early June to over $33 million by late August.

However, fees increased more steadily than the 86% weekly explosion in swaps. This indicates a significant development within the underlying activity.

While there were many users making trades in their accounts, they made fewer larger position trades. Therefore, this resulted in the trade activity being higher than the amount of money flowing through each trade.

Whale accumulation supports UNI’s rally

While higher activity strengthened Uniswap’s economic model, large holders provided another source of support for UNI.

Whale accumulation intensified in late May, with Binance’s largest users withdrawing an average of 7,400 UNI daily. These withdrawals reduced UNI’s immediately available Exchange Supply.

Notably, accumulation began before UNI reversed from $2.48 and rallied approximately 122% to $5.14.

Rather than selling into that recovery, whales kept moving tokens off Binance. This move suggested that conviction remained intact as prices climbed.

Monthly averages are currently around a still high number of 5,300 UNI per day and so far have limited the possible amount of sell-side pressure.

Still, it is possible that stronger protocol activity helps to support demand as well as continued whale accumulation.

Yet, this combination could also help in extending UNI’s price recovery.

Final Summary

• Uniswap [UNI] activity hit record levels as user growth and higher fees strengthened protocol usage.
• Sustained whale accumulation could support UNI’s rally toward the $7.80 resistance.