- Uniswap’s governance token UNI has fallen after rallying from $1 to $7.37
- Uniswap, an automated market maker, is in the business of facilitating token swaps
- The total value locked at Uniswap now stands at $1.94 billion
Uniswap’s governance token UNI has fallen after rallying from $1 to $7.37 in less than a week following its release to Uniswap users. Currently trading at $4.95, the token is down 32% but business is still booming thanks to the increasing value locked in the Uniswap protocol.
Uniswap is in the business of facilitating token swaps, such as exchanging BTC for ETH or UNI, by drawing upon the pairing provided by other users, Decrypt reports. The team behind the automated market maker has since launched the UNI token which acts as a governance token for the protocol.
Anyone who has used Uniswap before September 1 is eligible to release atleast 400 UNI which, during the most of its first day, was worth $3 each for a total of $1,200. Users on Twitter were calling it a “stimulus,” alluding to the same amount of federal stimulus checks given to Americans as aid during the coronavirus pandemic.
Centralized exchanges including Binance and Coinbase have also listed UNI on the same day.
After a few days, however, the strength of the UNI token has declined. Decrypt reported that trading volume for the token has decreased from $6 billion to just $2.2 billion.
Still, that amount is better than Sushiswap, another automated market maker which already has a governance token before Uniswap released its own. SushiSwap had, in essence, taken business from Uniswap and this likely forced Uniswap to hasten the release of its governance token. That’s according to Andre Cronje, the creator of Yearn.Finance. He argued that while the launch was perfect, he could not help but feel it was simply in response to SushiSwap.
“Never let other people set the pace for you, move at your own pace,” he said on Twitter.
Still, it appeared the UNI release had worked in favor of Uniswap. According to DeFi data aggregator DeFi Pulse, the total value locked at Uniswap now stands at $1.94 billion. SushiSwap’s locked value has decreased from $1.42 billion to just $516.3 million.