UNI (Uniswap) Token Analysis 02/04/2022Fundamental Analysis:
Uniswap is a popular decentralized trading protocol, known for its role in facilitating automated trading of decentralized finance (DeFi) tokens.
An example of an automated market maker (AMM), Uniswap launched in November 2018, but has gained considerable popularity this year thanks to the DeFi phenomenon and associated surge in token trading.
Uniswap aims to keep token trading automated and completely open to anyone who holds tokens, while improving the efficiency of trading versus that on traditional exchanges.
Uniswap creates more efficiency by solving liquidity issues with automated solutions, avoiding the problems which plagued the first decentralized exchanges.
In September 2020, Uniswap went a step further by creating and awarding its own governance token, UNI, to past users of the protocol. This added both profitability potential and the ability for users to shape its future — an attractive aspect of decentralized entities.
Uniswap DAO
The Uniswap DAO has over 310,000 members that can vote over the $1.6B treasury, governance and roadmap of the DEX by holding UNI governance tokens. Any UNI holders can submit a proposal, however it must garner up to 25,000 yes-votes before it can be eligible for further deliberation. The next phase is the consensus check, where the proposer has to highlight the core changes and garner at least 50,000 yes-votes. Finally, the governance phase has to attract 40M yes-votes for the proposal to be adopted. Uniswap was the most dominant DEX in 2021 in terms of trading volume, and the top ranked DAO in terms of the amount held in the treasury. However, it is currently ranked second, behind BitDAO — a DAO focused on funding and investing in emerging crypto projects. Check out our deep dive on Uniswap DAO and other top DAOs and how their governance systems work.
Uniswap exists to create liquidity — and therefore trading and the value that trading provides — for the DeFi sphere.
One of the major AMMs in operation at present, the protocol functions using a formula for automated exchange — X x Y = K. Founder Hayden Adams describes himself as the inventor of the particular implementation of the formula on Uniswap.
Uniswap is not just a decentralized exchange; it attempts to solve the issues that platforms such as EtherDelta experienced with liquidity.
By automating the process of market making, the protocol inceventizes activity by limiting risk and reducing costs for all parties. The mechanism also removes identity requirements for users, and technically anyone can create a liquidity pool for any pair of tokens.
According to Uniswap, their governance token (UNI) was created in order to “officially enshrin Uniswap as publicly-owned and self-sustainable infrastructure while continuing to carefully protect its indestructible and autonomous qualities.”
Uniswap V2 launched on Nov. 2, 2018, and introduced new features like ERC-20 pairs, price oracles, flash swaps and more. The latest version — Uniswap V3, launched on the mainnet on May 5, 2021. It features greater capital efficiency for liquidity providers, better execution for traders and enhanced infrastructure. Uniswap price reached an all-time high (ATH) of $44.97 leading up to the mainnet launch of V3. Since it’s launch there has been substantial interest in it’s UNI to AUD and UNI to EUR price pairs.
Uniswap is a decentralized protocol for trading, and UNI is its in-house governance token. UNI is an ERC-20 token, meaning it requires Ethereum to function.
ERC-20 merely defines a set of rules for tokens, as well as security considerations mainly related to the strength of the Ethereum network. For example, congestion can hike the price of gas needed to perform transactions, leading to delays and abnormally high transaction fees, which impact all participants.
Separately, smart contracts can cause security issues that could lead to DeFi traders losing funds; in fact, hackers have already succeeded in stealing millions of dollars in DeFi’s short lifetime as of September 2021.
Uniswap’s UNI governance token is available for trading on major exchanges against other cryptocurrencies, stablecoins, fiat currencies and more.
These include Binance, Huobi and Coinbase Pro, along with, naturally, Uniswap’s protocol itself — Uniswap (V2) and Uniswap (V3).
Uniswap came about as a plan to introduce AMMs on Ethereum to a wider audience. The platform’s creator is Ethereum developer Hayden Adams.
Adams worked in various projects while finalizing Uniswap, and his work was informed directly by Ethereum creator Vitalik Buterin. Buterin even ended up giving the protocol its name — it was originally known as Unipeg.
Adams has also said that the original inspiration for the Uniswap platform came from one of Buterin’s own blog posts. His original idea to focus on Ethereum came after a friend convinced him to begin researching and understanding the protocol in 2017.
The total supply of Uniswap’s governance token, UNI, is 1 billion units. These will become available over the course of four years, after which Uniswap will introduce a “perpetual inflation rate” of 2% to maintain network participation.
Token distribution currently consists of the following: 60% to Uniswap community members, i.e. users, 21.51% to team members, 17.8% to investors and 0.69% to advisors. The latter three distributions will occur according to a four-year vesting schedule.
Out of the majority set to go to users, 15% can be claimed by those who used Uniswap prior to Sep. 1, 2020. These even include users who submitted transactions which were never successful — they are eligible for 400 UNI.
The UNI token serves the purpose of enabling shared community ownership in the growth and development of the decentralized protocol. This allows UNI holders to participate in the governance of the Uniswap protocol and wider ecosystem, in a neutral and trustless manner. The success and adoption of Uniswap products will positively impact Uniswap price, hence incentivizing token holders to contribute to the self-sustaining development of the ecosystem.
Four years after the UNI token launch, in September 2024, a perpetual inflation rate of 2% annually will take effect. This is to ensure that participation in the Uniswap ecosystem continues, by disincentivizing passive holders.
The current CoinMarketCap ranking is #24, with a live market cap of $8,210,903,997 USD. It has a circulating supply of 689,033,313 UNI coins and a max. supply of 1,000,000,000 UNI coins.
UNI Market Capitalization Analysis:
Technical Analysis:
There exist Bullish Divergence of Price Value and MACD, which the sign of bearish trend reversal and start of the new Bullish trend which may lead to the new Economical Cycle.
There are Total of 3 Targets defined by the Average Confluences of the Fibonacci Expansion and Fibonacci Trend Base Extension. these confluences Points can even be counted as the Major Pivot Points .
The 3 TP gets its confirmation as the Bullish trend Triggers the 2 TP followed by some Price correction and Reaccumulation. on its Up Formation rally.
Currently the Price Value is at 78.6% Fibonacci retracement level; it means it has broken the 78.6% Fibonacci Retracement as the Resistance level and had rechecked it backed and it has been Proved to be the support area.
The Fibonacci Tools have been Drawn From 0$ to the ATH, so the Specified Levels are well Defined and Proved.
The Asset is at the Accumulation Level Currently, which means soon the smart many will Flow in it and the Price Value will get Pump and Appreciates
Probably we may not again see this 78.6% Fibonacci Retracement Level or bellow in the current cycle.
