Uniswap’s [UNI] rise and the memes that keep it afloat: The how and why of it all
- Activity on Uniswap surged due to rising interest in memecoins such as DOGE and PEPE.
- Fees generated on Uniswap began to surge as well.
Uniswap [UNI] has been dominating the DEX space for quite some time in terms of market share and volume. However, there has been an unexpected surge in activity on the DEX, due to the popularity of memecoins.
Read Uniswap’s [UNI] Price Prediction 2023-24
One of the memecoins that has been attracting a large volume on the Uniswap protocol was Pepe [PEPE]. This was due to the fact that PEPE garnered large amounts of attention from the crypto community in a short span.
According to LunarCrush’s data, the number of social engagements for PEPE increased by 176.8% over the last week. Additionally, the number of mentions of PEPE grew by 72.8% during the same period.
This attraction in PEPE resulted in a surge in its market cap. This spike in attention spilled over to other memecoins such as DOGE as well. However, despite a spike in attention for DOGE, it wasn’t able to witness the same amount of growth as PEPE.
In terms of the number of holders, DOGE was still way ahead of PEPE, with 4.79 million addresses holding DOGE. PEPE, on the other hand, has 93,637 addresses holding the memecoin.
Due to the low number of addresses holding PEPE, the holders of this memecoin could be vulnerable to rapid price movements caused by the behavior of whales.
As the memecoin sector continues to get competitive, DEXes such as Uniswap reap the rewards of user behavior. The number of active users on the Uniswap platform has reached a level not seen since May 2021, as per Dune Analytics’ data.
Data also revealed that Uniswap-related contracts have led to the burning of more than 15,000 ETH over the last seven days.
For context, when a smart contract is executed on the Ethereum blockchain, a certain amount of gas fee is paid in ETH, which is then burned, effectively reducing the total supply of ETH in circulation.
Realistic or not, here’s UNI’s market cap in BTC terms
Therefore, a higher level of smart contract activity on Uniswap has led to a higher level of ETH being burned. This is not only a healthy indicator for Uniswap but also for ETH.
Due to the high activity on the Uniswap network, the amount of fees generated by the protocol also increased. According to token terminal’s data, the cumulative fee acquired by Uniswap increased by 8.5% in the last week.