Uniswap’s Growth Amid Decline: Base Support vs Market Skepticism
The Essentials in Brief
The cryptocurrency Uniswap (UNI) has reached significant milestones thanks to the support of the Layer-2 blockchain Base, but is currently facing a price decline. Despite a notable increase in monthly active users and traders on the Uniswap platform, the cryptocurrency is experiencing a decline in both its price and the total value of assets locked in the platform (TVL). This raises questions about the long-term prospects of UNI.
Base’s Influence on Uniswap
Since the introduction of Uniswap on the Base blockchain in August 2023, a significant increase in platform activity has been observed. In particular, the integration of Memecoins like BRETT, which are based on Base, has led to increased trading volume on Uniswap. This resulted in an impressive growth of monthly active users by 55% in the second quarter of the year. The influence of Base on Uniswap is undeniable, but there are also challenges to be met.
Challenges and Decline of TVL
Despite its success, Uniswap faces challenges, particularly regarding the total value of assets locked in the platform (TVL). A decline of 11.68% in the last month suggests that market participants have become skeptical about the return the platform can offer. This could lead to a long-term reduction in liquidity on Uniswap.
Price Decline of UNI
The price of UNI has seen a decline of 9.07% in the last 24 hours and is currently trading at 9.12 USD. An important indicator, network growth, shows a decrease in the number of new addresses making their first transaction. This could indicate a decreasing demand and thus further price declines if this trend continues.
Our Assessment
The support from Base has undoubtedly led to notable growth at Uniswap, but the current challenges and the decline in TVL and UNI’s price raise questions about long-term prospects. It remains to be seen whether improvements in the Base blockchain and an increase in TVL can lead to a revival of Uniswap and its governance token. Investors should closely monitor developments and carefully weigh their investment decisions.
Sources: DeFiLlama, Santiment
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