The decentralized crypto exchange Uniswap wants to make up for lost ground in the competition for liquidity in the DeFi division with its own token called UNI. UNI achieved a price of a good 4 US dollars from a standing start. At the same time, Uniswap is once again attracting massively more liquidity.
UNI is the name of the magic formula with which Uniswap wants to put itself back at the top of the DeFi projects. Recently, Uniswap, as a decentralized crypto exchange for loan transactions, had to give away massive amounts of liquidity to new competitors such as SushiSwap. Now Uniswap reacts and brings its own token UNI on the market, as is communicated in a blog post. And at least the first results suggest that Uniswap’s strategy with UNI is successful: UNI is currently quoted at a good 4 US dollars shortly after the initial issue. At the same time, Uniswap’s liquidity has increased by 67 percent within the last 24 hours and is now the equivalent of a good 1.5 billion US dollars.
Background on UNI
UNI, like SUSHI, is on the one hand a governance token that enables users of the DeFi platforms to vote democratically on the future course. On the other hand UNI is freely tradable. 1 billion UNI were generated, of which 15 percent (150 million) will initially go to former users of Uniswap. This distribution has already begun.
20 million UNI are provided as an incentive to participate in four liquidity pools at Uniswap. These are already open and based on the currency pairs ETH/USD, ETH/USDC, ETH/DAi and ETH/WBTC. The 5 million UNI allocated to each will be distributed to those participating in the pools by 17 November. This is the reason why the liquidity of Uniswap has risen again by leaps and bounds, because now, in addition to the usual interest rates for provided credit, UNI are also available as a reward.
According to Uniswap’s four-year plan, over time 60 percent of all UNI will go to Uniswap users, 21.51 percent is reserved for the team, 17.8 percent for major investors and 0.69 percent for consultants. After the four years, the proposed inflation target is 2 percent.
Conclusion: Uniswap strikes back in the DeFi competition with UNI
The start of UNI is promising for Uniswap, the market accepts the offer and with the coup lost ground could be regained. If you have ever done business on Uniswap, you can request the UNI you are entitled to on the platform or have already had it credited to your account. If you want to access UNI via the new Liquidity Pools, you have to deposit funds for one or more of the four currency pairs mentioned above. For now, the DeFi headlines belong to UNI and Uniswap rightly points to its almost two-year history of proving the platform to be stable and the codes to be error-free. But recent events in the DeFi division also show that the next competitor is bound to come and only then will it become clear whether UNI and Uniswap can hold their own.