UNI, the governance token of Uniswap, is back to where it was in December 2023. As it is, bears have been unrelenting, wiping all gains posted in Q1 2024.
With bulls decimated, the hopes of UNI soaring to 2021 highs remain a mirage. The good news is that those who choose to HODL may reap benefits going forward.
Uniswap Is Growing And Layer-2 Is About to Change The Game
Not only is Uniswap a leader in decentralized exchanging, but it is also one of the largest protocols by total value locked (TVL).
By October 11, the DEX managed over $4.5 billion, mainly on Ethereum.
(Source)
It is present in multiple other chains, including the BNB Chain, and Ethereum layer-2 solutions like Arbitrum and Optimism.
But, following yesterday’s announcement, it looks like Uniswap developers are not resting on their laurels.
UNI Price Soars After Unichain Beta Release
Uniswap Labs, the creator of the DEX, released Unichain, an Ethereum layer-2.
Unichain is now available for testing with plans of launching on the main net later this year.
Layer 2 will be designed specifically for DeFi solutions, of which Uniswap is undoubtedly at the forefront. It will rely on Optimism technology, just like Base.
After this announcement, UNI price rose by nearly 10%, soaring above September 2024 highs.
(UNIUSDT)
The expansion means UNI extended gains, rising by roughly 70% from Q3 2024 lows.
There is a high probability that UNI will continue rallying, especially now that Uniswap Labs said Unchain will be core to the DEX.
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What Unichain Offers That Other DEXs Don’t
As expected from an Ethereum layer-2 platform, the new chain will offer fast block times and, uniquely, cross-chain interoperability enabled by Optimism’s Superchain.
Cross-chain swapping for Uniswap only makes sense because the DEX is available on multiple platforms, including Unichain competitors.
All this is part of their mission to scale the pioneer smart contracts blockchain while also cementing its position.
Sub-second block time will guarantee speed while users benefit from market efficiency and the risks of MEV, which is currently plaguing Solana.
Tech Companies Choosing Ethereum
The creation of Unichain follows a growing among technology companies.
OKX has its layer-2, while Sony is also building Soneium to further scale Ethereum.
Base, which Coinbase backs, is among the fastest-growing Arbitrum alternatives, looking at TVL.
As Uniswap Labs builds, UNI will benefit.
It is also considering that DEX plans to release its latest version, v4, in the coming days. The goal is to further enhance user experience and cement its lead as a DeFi and DEX leader.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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