DEX Leader Raises $11 Million in Series A Funding for Uniswap V3 Following an Explosive Month
A popular and widely used decentralized exchange (DEX) Uniswap has raised $11 million in Series A funding led by Andreessen Horowitz with additional investment from Paradigm, Parafi Capital, USV, Version One, Variant, A.Capital, and SV Angel.
This latest investment round came just over a year after Uniswap raised a seed round from Paradigm to advance its research and development.
The company is “thrilled” with this move. It will be using these funds to grow its team to build Uniswap V3, which will “dramatically increase the flexibility and capital efficiency of the protocol,” as per the official announcement.
Just two months back in May, a new version Uniswap V2 was released that allows for cheaper transactions, pricing oracles, increased resistance to attacks like “flash loans,” and more diversification by liquidity providers.
Uniswap protocol has already started hiring and is eager to showcase its design to the Ethereum community in the coming months.
“The Uniswap protocol is now one of the most widely-used platforms on Ethereum, with approximately $1.5B in volume in July 2020 alone. While this indicates initial protocol-market fit, we are even more excited for what comes next,” it said.
The volume has exploded in the past few months, from $6.2 million on June 20 to $120 million on July 27. On several days, this DEX exchange even beat up the popular centralized exchanges such as Gemini, Binance US, and Poloniex and is slowly moving closer to Coinbase and Kraken’s trading volume.
Last month, Uniswap also recorded 1.42 million web traffic, an increase of more than 57% from June’s 90,000. Even its users are growing rapidly, reaching 146.5k up from 24k at the beginning of January.
Unlike a traditional exchange, on Uniswap protocol, trading prices are determined by a deterministic algorithm, an automated market maker, based on demand.
On Uniswap, which doesn't list any tokens but virtually any ERC20 token can be traded; instead of setting the price, one wants to buy or sell, one “pools” an amount of ETH and the token to buy or sell. Pools contributors are rewards with fees for every swap, helping the market stay liquid.
Interestingly, it is one of the few protocols with no native governance token, which like many other DeFi platforms, might soon become a reality, given its growth and the explosion of interest in the protocol.