Uniswap plunges by 23% within a week, while SushiSwap gains visibility

  • Dune Analytics has proposed a vendor-neutral, community-centric analytics program on Uniswap.
  • Uniswap’s current governance contract has upgraded from Governor Alpha to Bravo, improving upgradability and protocol safety.
  • With the ongoing SEC investigation on Uniswap Labs, the token’s price has dropped nearly 23% within a week.

Layer-2 solution Arbitrum One recently launched on mainnet, and Uniswap and SushiSwap were listed as the first two decentralized applications joining the protocol. The competition between the two has further intensified with Sushiswap’s ecosystem development in recent months. 

SushiSwap competes with Uniswap for dominance

SushiSwap, a decentralized exchange (DEX) and automated market maker (AMM), was launched with additional functionality compared to Uniswap and incentivized Uniswap users to migrate to its platform. 

Since its inception, the two DEXes have competed for dominance. At the time of writing, Total Value Locked (TVL) or (total value of assets staked on Uniswap) is $6.58 billion, while for SushiSwap it is $4.19 Billion. 

It may be premature to expect SushiSwap to beat Uniswap in market dominance and staked assets. However, with the latest upgrades in its ecosystem, SushiSwap is prepared to capture higher TVL. 

SushiSwap may have started as a clone of Uniswap. However, new token issuances are decreasing every month, and users can capture newly issued SUSHI through incentives on liquidity pools. Users are incentivized to stake on SushiSwap’s liquidity pools, which is likely to drive volume from Uniswap to SushiSwap. 

Further, Uniswap Labs, the developer of UNI, is currently subject to the ongoing investigation by the Securities & Exchange Commission (SEC). 

The news of the investigation has negatively impacted trader sentiment, and UNI’s price has dropped 23% over the past week. 

The SEC’s litigation of Ripple Labs, the largest public holder of Ripple, led to a massive plunge in trader sentiment and the price of the altcoin, and proponents expect the investigation to have a similar impact in the case of Uniswap DEX’s native token UNI. 

This poses an opportunity for SushiSwap to replace Uniswap as a DEX with a larger TVL. 

Uniswap V3’s launch on Optimistic Ethereum mainnet enabled nearly ten times the savings in transaction costs. This launch and upgrades in Uniswap V3 have triggered a neck-and-neck competition between the two DEXes. 

Uniswap was severely criticized for a proposal to grant $25 million to Flipside Crypto, a community-enabled crypto analytics platform. Dune Analytics, an Ethereum ecosystem analytics platform, emerged as a staunch opponent of the grant proposal. 

The platform has now proposed a vendor-neutral analytics program on Uniswap. 

Further updates on Uniswap governance include an upgrade from Governor Alpha to Bravo, which boosts platform security and upgradability. 

Uniswap has fewer technical upgrades to look forward to in the short term; however, the 24-hour trade volume has hit $33.3 million (Arbitrum and Optimism combined), four times the previous all-time high. 

Uniswap is leading among decentralized exchanges, and it remains to be seen whether SushiSwap will dethrone the former.