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Why Uniswap’s latest development failed to push UNI towards the bulls

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Uniswap [UNI], one of the largest decentralized exchanges, collected the highest amount of fees in the last three months. However, the collected fees failed to translate into revenue. According to Messari, a crypto analytics firm, there were other protocols that outperformed UNI on this front.

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Here’s AMBCrypto’s Price Prediction for Uniswap for 2022-2023.

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“FEE”ling good

Messari, in a tweet posted on 16 October, mentioned that despite UNI collecting massive amounts of fees, OpenSea outperformed UNI in terms of revenue generated over the last three months. As can be observed from the image below, despite garnering huge amounts of fees, Uniswap failed to make it to the top 10 list of generating revenue.

Source: Messari

Another concerning factor for Uniswap investors would be the decline in the number of users being retained. The number of addresses being retained on the Uniswap network was on a constant decline. 

Source: Dune Analytics

However, since the beginning of 2022, there was an uptick observed in the number of new addresses being added on to the network. New addresses being added on to the network may have a positive impact on UNI in the near future.

Despite being unable to retain users, Uniswap still maintained its dominance in terms of volume compared to other DEX’s. At the time of writing, Uniswap was responsible for 67.2% of the total volume on DEX’s according to Dune analytics.

UNI not so united after all

Despite Uniswap’s strength in terms of volume, there were other areas where Uniswap needed improvement. After having a look at the graph below, it can be seen that Uniswap’s velocity witnessed a sharp decline over the past few days.

This implied that the average number of times that a UNI moved from one wallet to another dropped drastically.

Source: Santiment

This development coupled with Uniswap’s declining Market Value to Realized Value (MVRV) could be seen as a bearish indicator by potential investors. However, contrary to Uniswap’s shortcomings, whales continued to show interest in the token. 

According to WhaleStats, an organization that tracks crypto whales, the top 500 ETH whales were holding $56 million worth of UNI at the time of writing. One of the reasons for the increasing interest from whales could be Uniswap’s team’s continuous effort to grow their protocol. On 15 October Uniswap announced in a tweet that the Uniswap v3 would be deployed on zkSync2.0

However, despite all the efforts, the price of Uniswap continued to decline.

At the time of press, Uniswap was trading at $6.13 and had depreciated by 0.16% over the past 24 hours. Its volume had declined by 47.49% and its market cap fell by 1.80% in the same time period as well.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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