Will Ethereum be a goner without Uniswap?

• Ethereum depends a lot on the routers provided by Uniswap.
• The average ETH gas used increased, but new addresses on Uniswap dropped.

Out of all the blockchains in the crypto sector, Ethereum [ETH] is the one with the most use cases. This is also due to the spread of applications it has under its belt.

Read Ethereum’s [ETH] Price Prediction 2023-2024

However, Token Terminal showed that the ETH economy would not have reached its current heights if not for the contributions by certain contracts.

Ethereum has the Uniswap routers to thank

According to the blockchain data aggregator, a lot of projects including Uniswap [UNI], Tether [USDT], and Arbitrum [ARB] were some networks keeping the Ethereum blockchain alive. 

The top 10 contracts that keep the ETH economy running:

Uniswap: V2 Router
Uniswap: Universal Router
Tether: USDT
MEV Bot: 0x6b7…A80
Uniswap: V3 Universal Router
Arbitrum: Sequencer Inbox
Uniswap: V3 Router 2
MetaMask: Swap Router
Blur: Marketplace Proxy 1
zkSync Era:… pic.twitter.com/dIytV3Ddf8

— Token Terminal (@tokenterminal) October 28, 2023

However, out of all the top 10 contracts, Uniswap seemed to be the project with the highest contribution. A look at the data showed that Uniswap’s routers, including the V2, V3, and universal routers, have made immense contributions to the Ethereum economy.

A router is the core of the Uniswap protocol. It is used to create new pair contracts. Regarding the Ethereum network, the Uniswap router gives users the best gas-adjusted quarter when splitting trades or making transactions.

So, this means that, without Uniswap’s input, the transaction fees when making transactions involving ETH may have been higher. But has this affected Uniswap’s on-chain activity in any way?

Slow growth and rising costs

According to Santiment, Uniswap’s network growth was down to 76. Network growth measures the number of new addresses interacting with a project. When the metric increases, it means new users of the Uniswap protocol are making transactions at a higher rate. 

However, Uniswap’s network growth declined, as mentioned earlier. This is a sign that traction on the network was low, and adoption was very far from its highest. On the other hand, the volume on Uniswap has seen a notable increase recently.

Source: Santiment

This hike in volume suggests that there was a surge in the number of transactions, mostly likely involving ETH and other Ethereum-linked tokens. On Ethereum’s part, on-chain data showed that development activity has increased.

For context, the development activity measures the public code commits driven to ensure proper working conditions for a project. At press time, Ethereum’s development activity was 3.68. This increase indicated that developers were dedicated to keeping the Ethereum network healthy.

Realistic or not, here’s UNI’s market cap in ETH’s terms

Furthermore, data also showed that the average gas used lately has been increasing. At the time of writing, the ETH gas used was 19.27 Gwei. Gwei is the unit of Ether used to specify transaction costs on the blockchain.

Source: Santiment

The surge in the gas used means that demand for ETH has increased. This also means that Uniswap routers are actively working to keep Ethereum in good shape.