This may not be the rule of thumb, but recently it has been observed that decentralized finance [DeFi] often picks up steam when the larger cryptocurrency market gets stuck in a rut. Many DeFi apps have been a great metric amid recent market adjustments, but Uniswap [UNI] really stole the show with his recent all-time high social dominance.
Uniswap’s social dominance hit a record high since October 2020 on July 12, and while most of the market has struggled to recover, UNI is up 27% from its recent all-time low on June 26. In fact, by July 8, the price of the viola was up nearly 40% after the market crash on June 19, after which the movement of most of the altos was rather limited.
UNI really seemed to be riding on the back of a unicorn looking at these super bullish stats. Recent report also highlighted that Ethereum’s leading decentralized exchange, Uniswap, is by far the most popular DeFi protocol with over 2.3 million unique addresses. It is well known that altos tend to grow amid major ecosystem-centric updates, and Uniswap is no different.
The significant increase in the price of the viola, as well as its social dominance, can be attributed to recent events on the web. This includes developments such as the native integration of Uniswap into CoinMarketCap and the launch of smart automation for Uniswap v2. In addition, the third iteration of Uniswap, Uniswap v3, was recently rolled out to the Ethereum mainnet.
However, this is not all. Over the past few weeks, Uniswap has found itself at a rather bizarre crossroads. Notably, UNI development activity is declining, highlighting that the network is not as technically secure as at the end of last month, after which it began to decline. On the contrary, on July 12, there was a surge in developer activity.
Transaction volumes were high on July 4 and 8, but did not reach early June levels. Active addresses were at an all-time low, further reinforcing the fact that while ecosystem-based developments have spurred some activity and fundraising for the asset, they could not last long. This was also underlined by UNI’s sedentary trading volume, which declined some time ago.
Although the development of the UNI network did not show significant improvement, an interesting jump in its NVT to transaction volume ratio highlighted the good valuation and possible implementation of this asset. It also meant that the network was expensive compared to how much value it was moving towards, indicating a potentially overvalued asset. On July 9, the NVT (with transaction volume) ratio for Uniswap was at an all-time high. However, it dropped sharply shortly thereafter and stood at 332.8 at the time of publication.
Since some indicators point to a bear market and others to the opposite, it would be interesting to watch the Uniswap network in the coming days.