The decentralized trading platform Uniswap has been more successful than its centralized competitor Coinbase for four months in a row, according to data from CCData. That is special, because Coinbase is a listed entity that invests a huge amount in marketing and advertising, while Uniswap is a decentralized exchange (DEX) that mainly relies on its technology.
What is Uni Swap?
Uniswap is actually nothing more than a box of smart contracts that runs on the Ethereum (ETH) blockchain. There is no centralized software or server behind the platform. In April, the exchange processed about $37 billion in trade, while Coinbase had to settle for $34 billion in volume.
In March, Uniswap went through the roof, processing a total of $70 billion in transactions. Coinbase also did better in March, but stalled at a total of $49 billion.
The USD Coin (USDC) decoupling in March, along with the troubles of other stablecoins, was a major factor in Uniswap’s rise in popularity during that period. “Traders turned to on-chain trading platforms during that period of uncertainty,” CCData’s Jacob Joseph said in an email to CoinDesk.
Uniswap is the largest
“As the world’s largest decentralized exchange, Uniswap was well positioned to take advantage of declining liquidity in the market and growing regulatory focus on centralized trading venues,” said Joseph. We certainly saw that in recent months, for example with Kraken that the Securities and Exchange Commission (SEC) had to close its strike program.
But of course also with Coinbase, which received a Wells Notice from the SEC, also because of the exchange’s strike program. It seems that US lawmakers are preparing for quite a battle with the crypto industry and that apparently works in favor of decentralized alternatives like Uniswap.
Bitcoin and ethereum also performed well at the beginning of 2023, which is also a reason, according to Joseph, that decentralized applications are gaining popularity at the moment. At the end of the day, people are opportunistic, and now there seems to be some picking up in the crypto world again.