After a slow start, decentralized finance (DeFi) picked up throughout 2020, with over $11 billion in digital assets locked on these platforms. Uniswap, the decentralized exchange (DEX), becomes the first DeFi platform to cross the $2 billion milestone in total value locked (TVL). Such is the growth of the industry that Uniswap’s TVL was larger than the entire DeFi industry three months ago.
According to DeFi Pulse, Uniswap’s total locked assets’ value stands at $2.09 billion, as at the time of writing. This represents a sharp 800% surge in the value of assets locked in the DEX since August 8, just a month ago. Ethereum (ETH) leads in value with 2.9 million ETH (or 2.90%of the total ETH) placed in liquidity pools on the platform. ERC-20 based USDT and wrapped Bitcoin (wBTC) close out the top three positions.
The TVL in Uniswap represents 18.67% of the total TVL locked in DeFi products, currently standing at $11.1 billion. Maker, a lending and borrowing platform that allows minting of DAI stablecoin, is second with a total TVL of $1.93 billion.
Uniswap is an Ethereum based DEX that leverages liquidity pools instead of order books utilizing an automated market-making system for users to swap any ERC-20 standard-based token. Liquidity providers are then incentivized with the trading fees collected (about 0.03%) paid out to their addresses.
The spike in Uniswap’s TVL can, however, be greatly attributed to the launch of its native token, UNI, earlier this month. Shortly after losing close to $1.42 in TVL after the launch of Sushiswap, a similar platform, Uniswap has seen its fortunes change with the launch of UNI. It, however, should be noted that the drop in TVL was not fully attributed to Sushiswap.
On Sept. 17, UNI launched, airdropping over $500 million in UNI tokens to Uniswap users, which led to a sharp recovery in assets placed in the platform. In less than 48 hours after UNI’s launch, Uniswap’s TVL grew from $748 million to $1.9 billion, showing a great impact of the DEX.
With 4 billion UNI's still set to be distributed to the Uniswap users, the DEX is on course to be the first DeFi platform to hit the 410 billion in TVL milestone.