Uniswap launches UniswapX protocol, causing 3% surge in UNI price.

Uniswap launches UniswapX protocol, causing 3% surge in UNI price.

Uniswap Launches UniswapX: A Breakthrough in On-Chain Trading

Uniswap, the leading decentralized exchange (DEX), has recently announced the launch of UniswapX, a groundbreaking permissionless and open-source protocol for trading across automated market makers (AMMs) and other liquidity sources. This innovative protocol aims to revolutionize on-chain trading by offering better prices, improved self-custody swapping, gas-free swapping, protection against maximal extractable value (MEV), and no cost for failed transactions.

UniswapX: Addressing the Challenges of On-Chain Trading

UniswapX addresses the growing complexity of on-chain routing and the fragmentation of liquidity pools resulting from the increasing number of customized pool designs. This protocol outsources routing complexity to a network of third-party fillers who compete to fill swaps using on-chain liquidity like AMM pools or their private inventory. This allows swappers to use the Uniswap interface without worrying about getting the best price and ensures that transactions are always transparently recorded and settled on-chain.

One of the key features of UniswapX is gas-free swapping. Swappers sign a unique off-chain order, which is then submitted on-chain by fillers who pay gas on the swappers’ behalf. This eliminates the need for swappers to pay gas or hold a chain’s native network token to trade. MEV protection is also provided by UniswapX, which returns MEV that would be left on the table to be captured by an arbitrage transaction to swappers through improved prices.

UniswapX is not stopping at just improving on-chain trading. The protocol has plans to launch a cross-chain version later this year, combining swapping and bridging into one seamless action. This will enable users to exchange between different blockchain networks in a seamless and trustless manner. The use of bridges, specialized smart contracts that facilitate asset transfers between different blockchain networks, makes this possible. In addition, instead of receiving a bridge-specific token, users can choose which assets to receive on the destination chain.

Strong Resistance Causes UNI Token Retraction

After the announcement of the launch of the UniswapX protocol, the price of Uniswap’s native token, UNI, experienced a surge of around 3%. UNI reached a high of $6.152, a level not seen since April 2023. The excitement generated by the launch of this new protocol led to a surge in demand for UNI, as traders anticipated improved user experience and better prices for on-chain trading.

However, UNI faced a strong resistance line at this same level, causing the token to retrace and lose all the gains generated by the announcement. At present, UNI is trading at $5.738, down by 1.4% in the last 24 hours. Despite this recent dip, UNI has posted significant gains in the 30-day timeframe, with a staggering 28% profit.

UNI’s retrace on the 1-day chart

On the flip side, according to Token Terminal data, Uniswap’s market cap (circulating) currently stands at $4.76 billion, representing a 28.3% increase over the past 30 days. The market cap (fully diluted) is $5.77 billion, up 26.01% over the same period.

Uniswap’s total value locked (TVL) is currently $3.67 billion, a decrease of 0.54% over the past 30 days. The price fees (P/F) ratio (fully diluted) stands at 17.50x, indicating that the market values Uniswap’s future earnings potential at a premium. Uniswap’s trading volume (annualized) is $349.19 billion, representing a decrease of 8.05%.

In terms of user activity, Uniswap has had an average of 69.640 daily active users over the past 30 days, representing an increase of 2.7%.

Conclusion

The launch of UniswapX represents a significant development in the blockchain industry, offering a solution to the challenges faced by on-chain trading. With its improved self-custody swapping, gas-free swapping, and protection against MEV, UniswapX aims to enhance user experience and provide better prices for traders. The upcoming cross-chain version further expands its capabilities, enabling seamless and trustless asset exchanges between different blockchain networks.

While the recent retracement of UNI token after the UniswapX announcement may have dampened immediate market enthusiasm, the overall growth and performance of Uniswap indicate a strong market interest in the platform. With its increasing market cap, total value locked, and trading volume, Uniswap continues to be a dominant player in the blockchain industry, attracting a growing number of users seeking decentralized and efficient trading solutions.

Featured image from Unsplash, chart from TradingView.com

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