The popular decentralized exchange (DEX) platform on Ethereum, Uniswap, is celebrating a major milestone. Via his official Twitter account, the team behind the protocol announced that it has processed $1 trillion in trading volume ever.
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As shown below, this metric has been on an upward trend since September 2020. At that time, the protocol processed less than $10 billion in cumulative trading volume.
The $1 trillion mark was reached in less than a year as Uniswap moved to process around $250 billion in cumulative trading volume to $750 trillion in March 2022. The scale was on the rise despite the current downtrend across global markets.
The team behind Uniswap advertiser the following:
It was one journey from hell. As of today, the Uniswap protocol has experienced a cumulative lifetime trading volume of $1 trillion (…). We couldn’t have reached this milestone without the Uniswap community that continues to build alongside us. Here’s the next trillion.
Additional data provided by the team behind the protocol indicates that Uniswap’s popularity has been increasing along with its trading volume. DEX’s market share exceeded 50% in August 2020 and has reached over 60% since then.
In addition, the number of Uniswap users has recently reached nearly 4 million. In January 2021, the scale had less than 1 million users. This represents a 4-fold increase in just over a year. Uniswap inventor, Hayden Adams, added:
The size of 1 trillion dollars at all times. I don’t tweet highlights much these days, but four breaks do pop into my mind. I never expected Uniswap to grow the way it did. Thanks to everyone who was along for the ride.
What is behind this Ethereum DEX success?
There are three possible events that increased Uniswap’s market share and popularity. The first in the deployment of the second iteration, Uniswap v2 introduced new features and functionality iterated across the entire DeFi sector.
The second is the launch of the UNI governance code. The token was introduced around September 2020, when Uniswap fundamentals started to climb, and it was dropped to all users who interacted with the protocol.
The event marks an inflection point in the adoption of DeFi protocols. In the following year, the sector boomed with the introduction of non-fungible tokens (NFTs) into the mainstream and more people on board.
The third event was the release of the third version of DEX, Uniswap v3. This version provided more rewards for users with active investment strategies.
Today, most blockchain networks cannot exist without the DeFi sector and its own version of Uniswap. Despite its popularity, DEX and other protocols have been affected by the current negative price action across major cryptocurrencies.
Data from Token Terminal indicates that Uniswap peaked in September 2021 when its total closed-end value (TVL) approached $10 billion and its trading volume followed. Since then, this metric has been on a downtrend and currently appears to be consolidating.
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At the time of writing, UNI is standing at $5.57 with a loss of 5.5% in the last 24 hours.