Uniswap Beats Coinbase: Decentralized Trading Platform Takes the Lead
The decentralized trading platform Uniswap has surpassed Coinbase for four consecutive months in terms of trading volume, according to data from CCData. This is a remarkable feat as Coinbase is a publicly listed entity and invests heavily in advertising and marketing, while Uniswap is a decentralized exchange that relies mainly on its technology.
What is Uniswap?
Uniswap is a decentralized exchange that operates through a series of smart contracts on the Ethereum blockchain, without the need for a centralized server or software. In April, Uniswap processed over $37 billion in trades, while Coinbase recorded a trading volume of $34 billion.
Uniswap experienced a surge in popularity in March, processing a total of $70 billion in transactions, while Coinbase recorded a total trading volume of $49 billion. One of the factors that contributed to Uniswap’s rise in popularity during this period of time was the decoupling of USD Coin (USDC) and the troubles of other stablecoins. According to CCData’s Jacob Joseph, traders turned to on-chain trading platforms during this period of uncertainty.
Uniswap Surpasses Coinbase
As the world’s largest decentralized exchange, Uniswap was well-positioned to take advantage of the decreasing liquidity in the market and growing regulatory focus on centralised trading venues, according to Joseph. This trend is clearly visible, with the Securities and Exchange Commission (SEC) having to shut down Kraken’s “Strike” program. Additionally, Coinbase received a Wells Notice due to its exchange’s strike program. This indicates that US lawmakers are preparing for a battle with the crypto industry, and apparently favor decentralized alternatives like Uniswap.
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Another reason for the rise in popularity of decentralized applications at the moment is the stellar performance of Bitcoin and Ethereum at the beginning of 2023, according to Joseph. People are opportunistic and may be picking up on the crypto world again after a brief lull.
The Bottom Line
Uniswap’s success over Coinbase for four straight months is impressive, especially considering the latter’s investments in advertising and marketing. This indicates that decentralized exchanges like Uniswap may be the future of trading in the crypto world.