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Uniswap Q2 market performance: relatively good trading volume, plans to announce Wave 8 grant information

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Although the liquidity provided by Uniswap fell by 37%, it also outperformed the changes in the market value of the encryption market.

Original title: " State of Uniswap Q2 2022 "

Original author: Jerry Sun, Messari researcher

Original compilation: Karen

Key Summary

- Benefiting from market volatility and healthy arbitrage bot activity, Uniswap’s Q2 trading activity fell less than the overall cryptocurrency market.

- WBTC trading activity increased as WBTC acted as collateral for struggling CeFi institutions.

- Uniswap Grants Program announces Wave 8 grant information.

- Q2 Uniswap milestones included the launch of a fee tier on Polygon with fees as low as one basis point (0.01%) and the acquisition of NFT marketplace aggregator Genie.

Macro level

Although the market value of the cryptocurrency market fell by more than 50% in the second quarter, Uniswap's trading volume fell by only 8.7% compared to the previous quarter, partly due to the large volatility of the encryption market; Arbitrage bot activity, where bots can account for 75% of all trading volume, is a healthy sign. DEXs have matured over the past two years to the point that activity is driven by price efficiency rather than pure retail speculation.

In addition, the liquidity provided on Uniswap dropped by 37.1% in the second quarter, which outperformed the changes in the market value of the encryption market. It's not serious. In contrast, the price of ETH has dropped by nearly 70% in the same period.

Trade volume can be checked from Liquidity Provider (LP) fees. Compared to Q1, fees across all Uniswap networks except Optimism are down 21.9%. In contrast, in the past 90 days, LP fees on Optimism have increased by 146.9% from $1.4 million to $3.5 million.

The biggest drop in fees was incurred on Arbitrum, which fell 35.9% to $3.6 million in the second quarter. Although fees earned on Arbitrum were four times higher than those on Optimism in Q1, the $100,000 difference between the two in Q2 was negligible, again highlighting the influence of OP airdrops in the Layer 2 scaling wars. Will Arbitrum launch Token , and how this will affect trading on Uniswap remains to be seen.

micro level

Active V3 Marketplace

USDC/WETH

In the second quarter of Uniswap V3, the overall transaction volume of the "stable currency/ETH" pair was basically the same as that of the previous quarter. shrunk quarter-on-quarter.

USDC/USDT

As mentioned earlier, the introduction of the 1 bps (0.01%) fee tier makes Uniswap's stablecoin exchange pool competitive. However, USDC/USDT trading volume fell by 17.4% in the second quarter. It is worth noting that as the market panic caused by the decoupling of UST spread to USDT, the high volume during this period may have come from those users seeking to convert to USDC.

WBTC/WETH

The transaction volume of WBTC/WETH in the second quarter was more than three times that of the first quarter. As the chart below shows, the peak daily trading volumes in Q2 were nearly four times higher than at any other point in the past year. This is mostly due to CeFi loans being typically collateralized with BTC, Luna Foundation Guard (LFG), Three Arrows Capital, Celsius, BlockFi, and Voyager liquidating positions from institutions with significant collateralized exposure to BTC, or short sellers pushing prices to hell liquidation thresholds, Data provider Kaiko also pointed out that the trading volume of the WBTC pair has surged during this period, including a nearly 5-fold increase during the market crash in May 2021.

Active V2 market

The three most active markets in Uniswap V2 in the second quarter were USDC/WETH, FXS/FRAX, and APE/WETH.

USDC/WETH

The transaction volume of the USDC/WETH pair increased from $2.7 billion in the first quarter to $2.8 billion in the second quarter. than dropped a lot. Compared with the first quarter, transaction costs remained relatively stable.

FXS/FRAX

The FXS/FRAX pool saw a significant increase in quarterly trading volume, from $673 million in Q1 to $938 million. On the one hand, it was due to Terra 's decision to include FRAX into Curve 4pool, and on the other hand, the collapse of UST drove investors to be more cautious about algorithmic stablecoins.

APE/WETH

APE was airdropped to holders of BAYC and MAYC on March 17. The first day after the airdrop reached a peak transaction volume of nearly 45 million US dollars, and the expectation of land sales later also further promoted the transaction volume of APE .

Grant Program

The Uniswap grant program has deployed all the funds allocated to the program, and last quarter's Wave8 was the last round of project grants, with 230 applicants applying for a total of $900,000 in funding. Some highlight projects include:

GFX Labs ($50K)

Uniswap Grants $50k to GFX Labs to research how best to implement cross-chain governance for a single protocol.

DeFi Dev Course Creatio ($50k)

Used to create a new Web3 and DeFi-focused course on learning platform Pursuit.

Uganda Blockchain Club ($15,000)

Aims to fund 10 different university computer science programs in the country.

In June, Uniswap released the first Uniswap grant plan, stating that since the launch of UGP, it has provided about $7 million in UNI funding to 122 recipients. In terms of quantity and distribution, the largest The three project categories are Sponsorship, Tools, and Community.