In late March, Uniswap Labs announced its highly anticipated Uniswap V3 protocol. at the heart of V3 is centralized liquidity – the ability for liquidity providers (LPs) to trade within a custom price range and create separate price curves in the process. The design promises to make LPs 4,000 times more capital efficient by allowing them to provide the same depth of liquidity as V2 within a specified price range, while allowing for a significant reduction in idle capital.
Source: Uniswap Blog
In late March, Uniswap Labs announced its highly anticipated Uniswap V3 protocol. at the heart of V3 is centralized liquidity – the ability for liquidity providers (LPs) to trade within a custom price range and create separate price curves in the process. The design promised to make LPs 4,000 times more capital efficient by allowing them to provide the same depth of liquidity as V2 within a specified price range, while allowing for a significant reduction in idle capital.
Two months later, on May 5, Uniswap V3 finally launched, and within its first two weeks it was a huge success. it took only three days for Uniswap V3 to become the top decentralized exchange (DEX) on ethereum after Uniswap V2, facilitating more than $6.5 billion in transaction volume in the last seven days.
In fact, Uniswap V3 has been so successful that it is rapidly approaching Uniswap V2 in terms of trading volume, and at the current rate of growth, it could surpass V2 by the end of May.
Uniswap V3 has seen a significant increase in volume, perhaps most notably in the efficiency with which it has achieved this increase. Uniswap V3 facilitates almost as many transactions as Uniswap V2, while locking in less than 15% of the total value of V2. It is the only AMM that doubles the total value locked in each day, more than 5 times that of Uniswap V2, which currently ranks second.
The most popular pairs traded on Uniswap V3 are strong examples of asset efficiency gains. In particular, the stablecoin pair achieved similar trading volume to Curve 3Pool with only a fraction of the TVL. Curve’s 3Pool had $1.65 billion, while Uniswap’s USDC/USDT and DAI/USDC had only $125 million TVL. on May 19, Curve’s 3Pool had 24-hour trading volume of 265 million, while Uniswap’s USDC/USDT and DAI/USDC pools reached $198 million. For these pairs, Curve’s 24-hour volume to TVL ratio was 16%, while Uniswap V3’s ratio was 158%.
Source: Uniswap Analytics
Uniswap’s dominance continues to grow
The current success of Uniswap V3 combined with the continued dominance of Uniswap V2 has increased Uniswap’s market share to a new high of 61% in 2021. Uniswap’s market share continues to increase throughout 2021.
Uniswap’s growth comes at a time when DEX trading volumes are surging again. In the first 16 days of May, Ether’s DEX trading volume almost reached the previous month’s level (the highest ever recorded). They are expected to trade more than $123 billion this quarter, almost twice as much as in April.
This growth also comes at a time when a handful of competitors are releasing upgrades to their new protocols. The theme of each protocol is about capital efficiency, and each team has approached this issue through a variety of different approaches. the upcoming upgrade from SushiSwap, called Deriswap, will introduce a new AMM that combines trading, lending, futures and options into one protocol. the upcoming upgrade from Balancer will introduce a single vault that will deposit different pools are grouped together, which not only reduces the cost of gas for transactions across multiple pools (a pain point for Balancer V1), but also allows Balancer to improve capital efficiency through “asset managers” that allocate idle assets from Balancer pools to other protocols (such as Aave) for revenue.
Whether these alternative methods of improving capital efficiency will resonate more in the marketplace will be seen in the coming months. Uniswap V3 has only just begun and will continue to improve in the interim. the DeFi program has not yet begun to offer incentives to LPs on V3, users are only just becoming familiar with the parameters of V3, and the protocols for managing passive LP strategies have not yet been rolled out. Not to mention, Uniswap V3 is about to be deployed to Optimism, which may further drive growth.
One thing is clear right now, though: Uniswap V3 has been a huge success.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/uniswap-v3-data-performs-well-fuelling-its-leading-dex-dominance/
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