Uniswap Now Has More Than $3 Billion in Liquidity
Key Takeaways
- Uniswap’s liquidity peaked in November 2020 at $3.36 billion, then declined after the DEX’s incentives ended.
- Now, Uniswap’s liqudity has returned to $3.18 billion.
- New incentives for liquidity providers are under consideration.
Uniswap’s liquidity is surging. At press time, the decentralized exchange had $3.18 billion of liquidity.
Uniswap Liquidity on the Rise
Uniswap has reached this milestone without having any liquidity incentive program currently active.
Previously, to incentivize Liquidity Providers (LPs), Uniswap’s native token UNI was given out as a reward. This meant that LPs who provided liquidity to various pools had two distinct sources of income: firstly, the 0.3% fees generated from the pools, and, secondly, the UNI tokens that were awarded to them.
However, Uniswap’s liquidity incentives ended on Nov. 17, 2020. The exchange’s liquidity suffered a massive decline, going from $3.36 billion to $1.52 billion. But, since then, Uniswap’s liquidity has managed to rise up steadily. It sits at $3.18 billion at press time, according to Uniswap’s official stats.
Future Incentive Programs
Two Uniswap community members, MonetSupply and Coopahtroopa, recently proposed a new incentive program. This proposal planned to halve the monthly incentive allocation from 10 million UNI to 5 million UNI for four different pools. The proposed allocation was as follows:
- WBTC/ETH – 1.67M UNI/month
- USDC/ETH – 1.25M UNI/month
- USDT/ETH – 1.25M UNI/month
- DAI/ETH – 0.83M UNI/month
However, for reasons unknown, the proposal was stalled. It successfully passed through the first two stages of approval, but was never introduced as a formal governance proposal.
With an organic rise in liquidity, and in anticipation of the much-hyped Uniswap V3, it remains unclear whether this proposal will be revived and introduced as a formal governance proposal.
On Dec. 24, 2020, the Uniswap Grants Program became the first governance proposal in the Uniswap ecosystem, to meet quorum and to get passed successfully. This program will help develop Uniswap by providing grants to people and events, who add value to the Uniswap ecosystem.
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