Home News DeFi bucks crypto market correction as Uniswap v3 leads the charge

DeFi bucks crypto market correction as Uniswap v3 leads the charge

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The Decentralized Finance (DeFi) sector continues to attract increased attention from cryptocurrency investors and traders despite the downturn in cryptocurrency markets. DeFi’s total turnover is currently over $ 14.92 billion and analysts predict this figure will rise in the coming months. Uniswap became the leading DEX in terms of trading volume, after successfully launching version 3 of its platform in May. Uniswap v3 currently averages $ 1.2 billion in daily transaction volume. Which gives it an impressive 13.79% market share for DEX, surpassing v2. The token of the Uniswap exchange, UNI has also increased significantly in value. Basically, UNI is one of the most efficient cryptocurrencies since the beginning of the year. In addition, a number of other DeFi tokens have also spearheaded the rally in the markets, with Maker MKR up 91% and YFI Yearn.finance up 72%.

Uniswap v3 success

The third version (v3) was designed as an enhancement to v2 as the update aims to attract larger investors and improve the liquidity provider experience. True to its goals and objectives, Uniswap v3 has reached an impressive milestone that surpasses the daily transaction volume of Uniswap v2.

Uniswap v3 brought in $ 4.5 million in daily fees and v2 brought in $ 3.8 million in daily fees, while Bitcoin lagged $ 3.7 million.

Differences between Uniswap v3 and v2

Uniswap v3 significantly different from v2 in terms of features offered by the exchange. The flagship update is the introduction of concentrated liquidity. It gives liquidity providers the ability to decide in what price range their capital will be used.

In addition, Uniswap v3 provides capital efficiency of up to 4000x, allowing users to earn significantly more than Uniswap v2. Oracles can be integrated into Uniswap v3. Which has the optional feature of instant TWAP delivery for any period in the last 9 days.

Also the third version has added new commission levels. Traders must pay higher commissions on transactions with more volatile and therefore more risky assets. The rates of such assets are more prone to change during the transaction. So, the developers decided that it would be fair to provide liquidity providers with the opportunity to earn additional interest on them.

These and many other proposals are largely responsible for the epic milestones achieved by Uniswap v3 in such a short span of time since its May 2021 launch.

Conclusion

Analysts believe that Uniswap v3 may gain wider acceptance by liquidity providers and retail users than Uniswap v2 . Due to its improved functionality. Note also that the third version was the same catalyst for DeFi as the second was in 2020.

Moreover, analysts point out that DeFi has seen fruitful growth since early 2020. Meaning DeFi has been showing positive signs for over 1.5 years now.

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