Connect with us
Active Currencies 14575
Market Cap $2,663,584,346,830.97
Bitcoin Share 50.17%
24h Market Cap Change $-2.05

Will Ethereum be a goner without Uniswap?

2min Read

Uniswap’s routers including the V2, V3, and universal routers, are making immense contributions to the Ethereum economy. However, Uniswap’s growth has been stunted.

Will Ethereum be a goner without Uniswap?

Share this article

  • 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. 

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.

Uniswap volume and network growth

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.

Ethereum development activity and ETH gas used

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.

Share

Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.