DeFi Summer 3.0? Uniswap overtakes Ethereum on fees, DeFi outperforms

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Decentralized exchange (DEX) Uniswap has overtaken its Ethereum blockchain host in terms of fees paid over a seven-day rolling average.

The rally appears to be part of a recent wave of increased demand for DeFi amid the current bear market. Decentralized finance (DeFi) platforms such as Aave and Synthetix have seen a sudden rise in fees paid over the past seven days, while the price of local tokens and others such as Compound (COMP) have also boomed.

According to Crypto Fees data, traders on Uniswap earned an average daily total of $4.87 million in fees between June 15 and June 21, surpassing the average fee of $4.58 million from Ethereum users.

Uniswap’s more advanced v3 protocol (based on the Ethereum mainnet) accounts for the lion’s share of the total fee of $4.4 million, while the v2 variant also contributed a notable amount of $336,556.

During this period, Ethereum’s total fees only exceeded Uniswap’s fees in two of the seven days. In terms of peak day fees generated, Uniswap topped $8.36 million on June 15, beating Ethereum on the same day at $7.99 million.

Highest Paid Fee: Encoder Fee
Uniswap enables peer-to-peer (P2P) swaps of Ethereum-based tokens without a central authority to facilitate trades. This is achieved through automated smart contracts. Under the Uniswap fee structure, the fee is paid by traders to the liquidity providers who receive 100% of the fee on DEX.

RELATED: Uniswap breaks 1TB in size — but only used by 3.9 million addresses

Given that Ethereum is the blockchain home to the majority of DeFi, and is known for its exorbitant fee structure, a DEX like Uniswap outperforms the blockchain in fees over the course of a week.

According to CoinGecko data, Uniswap (UNI) has pumped 17.4% over the past seven days to $5.18 at the time of writing. The recent acquisitions of market aggregator NFT Genie and the appointment of former New York Stock Exchange chief Stacey Cunningham as a consultant at Uniswap Labs may have contributed to this.

Increase DeFi
Uniswap is not the only platform that has seen a rise in fees and token prices lately, as the data also shows strong investor demand for several DeFi platforms despite the current bear market.

Lending protocol Aave and synthetic derivatives trading platform Synthetix in particular rank third and fifth in terms of average fees paid over the past seven days at $981,883 and $600,214, respectively.

Like Uniswap, Aave saw a fee increase on June 15, increasing its total by 69% to $1.44 million. Its native token Aave (AAVE) has also pumped 22% since then.

The rise of Sythentix was the most notable. The platform saw a massive 928% increase in fees paid between June 11 and June 13 as the number rose to $843,297. The total fee then fell to nearly $400,000 by June 17 before rising another 150% to nearly $1 million on June 19.

The surge can also be seen by watching Synthetix (SNX), which is up 105% since Sunday to stand at $3.08 at the time of writing. The main reason for this appears to be the Synthetix 120 improvement proposal launched last week that enables users to “swap assets atomicly without refunding fees,” thereby increasing the speed of trading.

Contrary to this trend, fees on the Compound lending platform have fallen since April, generating just a seven-day rolling average of $11,753 over the past week, even though its native COMP token has increased 16.7% over this time frame to settle at $40.50.

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