The great Uniswap casino

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Sanfam
Aug 14, 2020

The growth of DEXes' activity over the past few months have been eye-popping to say the least. In fact, the ratio of DEX vol to CEX vol rocketed to 2.10% in June, which is is unheard of since... well.. ever.

Ratio of DEX vol to CEX vol until June 2020 - Larry Cermak

To put this into perspective, on Aug 11th, Uniswap's past 24hrs volume was $267M, surpassing most CEXes out there.

Uniswap volume vs CEXes - Zack Voell

Much of this was thanks to the attention liquidity mining and AMM fees brought to Defi over the past few months. Starting in June with COMP's launch where it was first available for trading on Uniswap.


All hail the DEX king

When we look at the Defi landscape, in particular the DEX segment, Uniswap pretty much dominates it in all areas:


Trading volume on DEXes

It recently hit a 24hr trading volume of $266,374,266 - almost 4 times more than the #2 DEX, Curve.fi ($66,725,409).



Total transactions on DEXes

It recently hit a 24hr total transactions of 115,555 - almost 9 times more than the #2 DEX, Balancer (12,921).



Number of users on DEXes

Uniswap at

The number of users recently hit 22,174 - 9.63 times more than the #2 DEX, Balancer (2,302).


The rather impressive thing is that Uniswap managed to achieve all this... without the use of liquidity mining (issuing a token) and only having a standard 50/50 AMM pool structure, unlike Balancer.



The Uniswap attraction

Defi and Oracles Altseason - Sanbase

In the past few months we have also seen a great altseason with coins specifically in the Defi and Oracle segments making a minimum of over 300% so far. Those that made bank on such runs now have spare cash to throw around and are likely not to pass on a good opportunity. On the flipside, people that were on the sidelines and missed out on such gains are also hungry to look for the next gem.


And so the hunt was on.


Uniswap gem hunters go! - Twitter


Currently, the most common exposure is to work with coins already listed on centralized exchanges, and while they do provide good liquidity and are more legit, it does not provide the alpha advantage and can be considered "rather crowded".


So one will have to venture further into the realms unknown to discover those gems - Enter Uniswap.


On top of that...

  • No KYC required- Just your ETH wallet and you
  • Decentralized Listing - Anyone that's willing to provide liquidity for a coin is able to launch it.
Top Uniswap coins - CoinGecko

Majority of the coins are probably very foreign for most people out there and rightfully so. There are alot of scam coins, vapourware and dead coins (only to be revived on Uniswap for quick flips) but.... there are some legit projects to be found.


So who needs Binance IEOs when Uniswap is providing projects a place to launch their token and have a ready market participants willing to provide liquidity and pump it to the moon?


Instead, the usual listing process is reversed. Some of them actually made their way into centralized exchanges, take TEND for example, a doge-like meme coin with pretty interesting experimental tokenomics that went pretty viral for awhile on Uniswap and Poloniex eventually got it listed.



Tools of the trade

To facilitate the search, gem hunters also rely on Uniswap listing bots:

Uniswap listing bot - Telegram

Things can move rather fast when it comes to the new listing of coins on Uniswap and you can't really track the price action on major platforms (tradingview, coingecko, coinmarketcap) quickly. The best way would be to use a the pair explorer on dex.io.


Exploring Uniswap pairs - dex.io


When the music stops, will you be holding on to the potato?

In many ways, the Uniswap casino's purpose is made to drain liquidity from gamblers to the smart folks that will put that into legit projects. They know that this "easy to make 10x!!!" hopium won't last and will milk it as much as possible.... while they can.


It's a game of hot potato and only a matter of time the bubble pops.


People will be burnt, left with shitcoins that they have no idea what they bought and once liquidity is gone, they can't exit. To get an idea of how a situation can change overnight, just look at what happened to YFFI - The not so legit clone of YFI.


Here's another recent example:


BOXX, a dead project was revived when some traders started to shill it as a Uniswap gem.

BOXX shilling - Reddit

Sure, liquidity came in and folks that got in early manage to have a 200%-300% gain... but...once someone decides to dump (whether it's a old bagholder or the shillers), the party is over.... good luck and welcome to the BOXX potato community.

BOXX listing on Uniswap - Sanbase

When the Uniswap bubble pops, we should then see a temporary shift back to centralized exchanges as people made money off/lost a crap on Uniswap look to make more/back their money.


Stay safe out there and be sure not to get caught up in the mania.

CRYPTO MARKETDEFI
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Sanfam
Aug 14, 2020

Thanks for reading!

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