Uniswap, one of the globe’s foremost decentralized exchanges (DEX) as measured by total value locked (TVL), stands on the brink of a significant achievement on Arbitrum, the top layer-2 platform by TVL on Ethereum. Fresh data from Dune Analytics, forwarded by Uniswap Labs, reveals that Uniswap on Arbitrum is inching towards a mind-boggling $150 billion in total swap volume.
Capitalizing on the DeFi Surge
As of April 25, the cumulative swap volume on Arbitrum facilitated by Uniswap had surpassed an impressive $146 billion. This figure has showcased a steady incline over the past three years, dating back to when Uniswap made its debut on Arbitrum in June 2021, as per on-chain records.
A look back at August 2021 shows Uniswap as handling less than $5,000 in swap volume. The tide turned soon after, and Uniswap gradually built momentum throughout 2022’s crypto bear run. Of particular note is a sharp surge from October 2023 that coincided with the onset of the crypto boom, fueling Ethereum to soar over a hearty $4,000 in the first quarter of 2024.
The swelling swap volume on Arbitrum is a testament to the growing preference for Decentralized Finance (DeFi) solutions among users. With Uniswap on Arbitrum nearing the $150 billion mark, an escalating number of users seem to be flocking to this popular DEX for transactions, all the while retaining control over their assets.
Part of this surging popularity of Uniswap on Arbitrum can be attributed to its significantly lower transaction fees compared to Ethereum’s mainnet. Via Arbitrum, optimistically touted as the roll-up solution, swappers are treated to low transaction fees. Additionally, they can trade from a secure, scalable milieu, underpinned by Ethereum’s mainnet.
Prominently, the development team on Ethereum recently rolled out Dencun, unveiling a fresh transaction format known as “blobs”. With this, layer-2 solutions can now store substantial chunks of data off-chain, relieving the mainnet bloat. The downstream effect of this is a sharp drop in transaction fees, drastically improving the user experience for Arbitrum and other layer-2 users like Base and Optimism.
After Dencun’s activation, Uniswap Labs has mapped out plans to roll out v4. This new version is all set to incorporate features such as Hooks, a development the creators assert will make the DEX even more efficient and flexible. The unveiling is set for later this year.
However, despite the projection that Uniswap V4 would galvanize the DEX and DeFi community, the plan suffered a temporary hiccup with the United States Securities and Exchange Commission (SEC) issuing a Wells notice. The regulatory body has made its intent to sue very clear.
Nonetheless, Uniswap’s founder, Hayden Adams, has been equally clear in his defiant response. He has confirmed in a post on X their readiness to put up a fight against any potential legal challenges.
