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Uniswap’s Massive $100M MEV Windfall: 10% Returns for Token Holders

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  • $368 million in fees could now go directly to Uniswap Labs instead of Ethereum.
  • 10% of fees generated through MEV ($100 million) could be shared with UNI tokenholders.
  • $1.3 billion in trading fees across five chains in the last year underlines Uniswap’s dominance in the market.

Uniswap’s new layer-2 blockchain, Unichain, promises significant gains for Uniswap Labs and its tokenholders but could spell losses for Ethereum holders. According to DeFi Report founder Michael Nadeau, Unichain could bring close to $500 million annually in fees to the Labs, fees that would have otherwise gone to Ethereum validators.

Unichain’s launch on October 10 is expected to be a game-changer for the Uniswap ecosystem. Over the past year, Uniswap paid $368 million to Ethereum validators, a sum that would now flow directly to Uniswap Labs and its tokenholders, as highlighted by Nadeau in his October 13 post on X (formerly Twitter). The move shifts a large revenue stream away from Ethereum’s network.

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Source

Nadeau also pointed out that Uniswap Labs would control all Maximum Extractable Value (MEV) on Unichain, a major shift from Ethereum, where validators previously captured that value. MEV is a vital part of DeFi, allowing validators to profit from reordering transactions in a block. Over the past year, MEV accounted for roughly 10% of fees on the exchange, amounting to about $100 million.

Uniswap Labs’ Big Win

This control gives Uniswap Labs the opportunity to share some of these profits with its token holders, adding more value to the UNI token. Liquidity providers (LPs) are also expected to benefit by participating in the settlement process and MEV capture through staking, a feature that could enhance their returns.

While Uniswap Labs stands to gain, Ethereum validators and ETH holders might take a hit. Unichain’s existence could lead to fewer fees flowing to Ethereum and less ETH being burned, which could negatively impact Ethereum’s value. Validators, in particular, are likely to see reduced income as they lose access to the lucrative MEV from the exchange’s ecosystem.

Nadeau’s warning comes at a time when Ethereum is undergoing its own challenges. With the decentralized exchanged generating over $1.3 billion in fees across five chains—Ethereum, Optimism, BNB Chain, Base, and Polygon—Ethereum validators have relied heavily on the exchange for a share of their rewards.

Vitalik Buterin, Ethereum’s co-founder, previously criticized the idea of Unichain in a September 2022 post, arguing that the exchange’s strength lies in its simplicity. But with Unichain now live, it remains to be seen whether Buterin’s concerns will hold true or if the exchange’s leap into its own blockchain will revolutionize DeFi further.

The launch of Unichain is a pivotal moment in the DeFi space. While it may hurt Ethereum’s ecosystem, the potential rewards for Uniswap Labs and UNI tokenholders are immense. Unichain could transform how the decentralized exchange operates, making it a leading force in the next phase of DeFi evolution.

Uniswap (UNI) Fully Unlocked: Market Implications After 4-Year Lockup Period

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UNI, the governance token of Uniswap, has completed a four-year unlocking cycle, which means that 100% of the token supply is now in circulation. This major development was highlighted by on-chain analyst Ember through an X (formerly Twitter) post, which indicates a considerable change in the UNI market.

UNI was launched in September 2020, and its allocation was planned to be distributed gradually, with 83% of the total supply being reserved for the team, investors, advisors, and the community treasury. As the unlocking period is over, all the UNI tokens assigned can be considered as available in the market. However, the actual flow of these tokens has been much slower and more constant.

Uniswap Distribution and Market Impact

The distribution of UNI tokens was done in a way that gave 2% of the tokens as liquidity mining incentives and 15% to early users in an airdrop which was then put into circulation. The other 83% that was distributed to the team, investors, advisors, and the community treasury has only just emerged from its four-year lockup.

The community treasury was distributed 430 million UNI, which is 43% of the total tokens; 40% was given to the team and early investors with 400 million UNI. With this, it is now important to know how much of these allocations has been brought into the market and what this implies for the price of UNI and its liquidity.

Treasury’s Slow UNI Release

The community treasury’s 430 million Uniswap tokens are fully unlocked, but only 30 million of them are available. The market has seen 2 million UNI has been injected into the market. This still leaves a rather large 399,789,850. There are still 8 million tokens remaining in the treasury, which is suggestive of a slow and steady release of these tokens into the market.

Likewise, the 400 million Uniswap assigned to the team, investors, and advisors are now unlocked. Of this, about 58.1 million UNI have been minted in the market, and the large investors like Andreessen Horowitz, a16z, has not sold most of their allocated UNI.

Even with UNI fully unlocked, the integration was able to only provide about 258.3 million Uniswap tokens, or approximately 25.83% of the total amount of the cryptocurrency in circulation, is in the market. 

This limited actual circulation also does not have a severe effect on the token’s price as most of the unlocked tokens are still unused. The supply is still sitting in large holders’ wallets, so traders and investors will keenly observe further decisions on whether or not to sell. This shift to the total circulation brings about prospects and risks to the market players as they anticipate the next phase of the Uniswap life cycle.

Uniswap CEO Clears Fee Demands and Bribery Allegation

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Uniswap CEO Hаydеn Adаms hаs vеhеmеntly dеniеd rеcеnt аllеgаtions circulаting on sociаl mеdiа plаtform X, clаiming thаt Uniswаp dеmаndеd pаymеnts from dеcеntrаlizеd finаncе protocols for dеploymеnts.

In а twееt postеd on Sеptеmbеr 12, Adаms clаrifiеd thаt nеithеr Uniswаp Lаbs nor thе Uniswаp Foundаtion chаrgеs fееs for protocol dеploymеnts. Hе еmphаsizеd thаt dеploymеnts occur through govеrnаncе votеs аnd еxplаinеd thаt thе rеquirеmеnts for dеploying on а nеw chаin аrе dеtеrminеd by thе lеvеl of аctivity аnd еffort involvеd.

Thе аllеgаtions аgаinst Uniswаp аrosе аftеr аn X usеr, Wаgmi Alеxаndеr, clаimеd thаt Uniswap hаd rеquеstеd а substаntiаl sum of $20 million for аn inеffеctivе dеploymеnt. This clаim followеd а twееt from Kеnе Ezеji-Okoyе, thе co-foundеr of Millicеnt Lаbs, who аllеgеd thаt it hаd chаrgеd $10 million for protocol dеploymеnts аnd аnothеr $10 million in usеr incеntivеs аimеd аt trаding cаrbon crеdits.

Uniswap’s Response to Regulatory Challenges

Uniswаp, а prominеnt dеcеntrаlizеd finаncе protocol, hаs rеcеntly fаcеd rеgulаtory scrutiny from US аuthoritiеs. In Sеptеmbеr, thе Unitеd Stаtеs Commodity Futurеs Trаding Commission (CFTC) аccusеd Uniswap Lаbs of illеgаlly providing lеvеrаgеd cryptocurrеncy trаding to US rеtаil invеstors.  To rеsolvе thе chаrgеs, Uniswаp Lаbs hаs аgrееd to pаy а $175,000 civil pеnаlty аnd to stop brеаching thе Commodity Exchаngе Act.

Prior to this, in April, thе US Sеcuritiеs аnd Exchаngе Commission (SEC) аllеgеd thаt Uniswap wаs opеrаting аn unrеgistеrеd sеcuritiеs еxchаngе. Uniswap rеspondеd by аssеrting its stаtus аs а softwаrе compаny аnd dеnying bеing аn еxchаngе, brokеr, or clеаring firm undеr sеcuritiеs lаws.

Dеspitе thеsе rеgulаtory chаllеngеs, Uniswap rеmаins onе of thе most populаr dеcеntrаlizеd finаncе protocols. It fаcilitаtеs tokеn swаps on ovеr а dozеn blockchаin nеtworks аnd currеntly boаsts а Totаl Vаluе Lockеd (TVL) of $4.357 billion. Thе plаtform’s mаrkеt cаpitаlizаtion stаnds аt $5.066 billion, with its tokеn pricе trаding аt $6.72 аs of Sеptеmbеr 12.

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Source: Defillama

In tеrms of dаily аctivity, It rеcordеd а 24-hour tokеn volumе of $176.82 million, with liquidity stаnding аt $52.41 million. Morеovеr, 9,545 аctivе аddrеssеs intеrаctеd with thе protocol in thе sаmе pеriod, highlighting strong usеr аctivity in thе dеcеntrаlizеd finаncе spаcе.

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Uniswap in Hot Water: CFTC Orders $175k Penalty

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In a significant move, the CFTC issued Uniswap an order accusing the DEX of illegally offering leveraged or margined retail commodity transactions in digital assets via a decentralized digital asset trading protocol. The order requires Uniswap Labs to pay a $175,000 civil monetary penalty and to cease and desist from violating the Commodity Exchange Act [CEA], as charged. 

“Today’s action demonstrates once again the Division of Enforcement will vigorously enforce the CEA as digital asset platforms and DeFi ecosystems evolve,” said Director of Enforcement Ian McGinley. “DeFi operators must be vigilant to ensure that transactions comply with the law.” 

The prominent DEX platform has been under intense regulatory scrutiny for quite some time. Back in April, the SEC issued a Wells Notice to Uniswap indicating that the regulator was considering pursuing enforcement action against the trading platform. The move signaled the SEC’s crackdown against the DeFi industry.

Uniswap Survives Regulatory Storm: Expert Weighs In

Reacting to the CFTC’s order, crypto analyst Adam Cochran stated that while he believes the order is unfair and misguided, it is not a major setback for Uniswap. He noted that the DEX delisted the leveraged tokens after being alerted to the issue and paid a small settlement. Cochran also emphasized that the responsibility for ensuring compliance with regulations lies with the user, not the platform.

Although acknowledging that the CFTC’s order provides some clarity on the regulatory landscape for DeFi platforms, Cochran remained critical of the regulator’s approach saying, “While CFTC faulted Uniswap for displaying these to US users, they didn’t hold them criminally liable, didn’t argue they were an illegal futures exchange in and of itself. They were simply liable for offering/soliciting due to not restricting.”

Uniswap
Source: DegenLex

CFTC’s action highlights the importance of compliance with existing laws and regulations. Meanwhile, the DEX’s native token UNI is currently retesting the $6.6 resistance level. A breakout above this could lead to targets of $7.45 and potentially $8.85. However, if the price fails to break through, support levels lie at $5.9 and between $4.6 – $3.8. The liquidation heatmap suggests minor selling pressure between $5.5 – $4.9 and significant selling pressure above $7.

Uniswap (UNI) Price Holds Steady Amidst Bearish Market: Analyst Eyes $42 Target

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Despite widespread bearish sentiment gripping the cryptocurrency market, Uniswap (UNI) is showing remarkable resilience and potential for substantial upward movement. As Bitcoin (BTC) experiences a major sell-off and sharp decline, dragging down many altcoins with it, UNI has managed to maintain a strong position.

In the past week, UNI has only dipped slightly by 0.63%. However, over the past 30 days, the token has defied the overall market trends, surging by nearly 32%. This impressive performance highlights UNI’s strength and the positive outlook surrounding it, even as the broader market struggles.

At the time of writing, the price of Uniswap stands at $9.43, with a 24-hour trading volume of $683.96 million and a market capitalization of $5.65 billion. While the UNI price has decreased by 4.85% in the last 24 hours, the overall sentiment remains optimistic, indicating potential for significant upward movement in the near future.

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Analyst Predicts $42.49 Price Target For Uniswap (UNI)

The outlook for Uniswap (UNI) has taken a bullish turn as analysts predict significant price movements. Renowned crypto expert JAVON MARKS has shared insights indicating a promising future for the decentralized exchange protocol.

According to the analyst, UNI’s price has recently broken through a crucial resistance trend, marking a pivotal moment in its trajectory. His analysis suggests a staggering target of $42.49, a remarkable 291% surge from its current valuation. This optimistic projection has sparked enthusiasm among investors, with many already witnessing the beginnings of this upward momentum.

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Building upon this sentiment, Changelly, a leading cryptocurrency exchange platform, has released its latest forecast for Uniswap. The forecast predicts an 8.88% increase in value, with UNI poised to reach $10.91 by June 12, 2024. This forecast adds to the growing consensus that Uniswap’s potential remains untapped and primed for growth.

Looking deeper into market sentiment, technical indicators on Changelly show a nuanced landscape. Even though 46% of people feel Bearish, beneath that, it also has a bit of a Bullish feel, optimism for the future trajectory of UNI. Further, the widely followed gauge of market sentiment, the Fear & Greed Index, currently sits at 72, indicative of a state of Greed among investors.

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Uniswap Facing Resistance at $7.70: Analyst Eyes Short-term Rally Towards $10

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Uniswap (UNI) has gone below the lower limit of its upward channel suggesting that the rate at which it is climbing up is lessening. The currency is now facing resistance near 7.70 levels. This position could produce negative reactions, although a break above 7.70 may imply optimism.

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The Negative Volume Balance notes that trading volume for downward price changes is higher than that for ascending prices, thus indicating deteriorating investor trust. The RSI (Relative Strength Index) has just fallen below 30 after weeks of falling prices; hence, UNI shows strong negative momentum, suggesting further bearish trends ahead. Still, low RSIs may mean that an asset is oversold, especially with respect to prominent stocks, thereby creating an opportunity for a bullish reversal.

Uniswap’s (UNI) current price stands at $7.50 following its last update, accompanied by 24-hour trade volumes amounting to $256.95 million and a market cap valued at $4.49 billion. In the past day, UNI price has slightly decreased by 0 .57%.

UNI 1D graph coinmarketcap
Source: CoinMarketcap

Uniswap (UNI) Potential Short-Term Rally: Targets $10 Mark

Despite these bearish signals, crypto expert Ali Martinez shed light on an intriguing development in a recent analysis: the TD Sequential indicator has just flashed a buy signal on the daily chart for Uniswap. This signal suggests that $UNI might be gearing up for a short-term rally lasting anywhere from 1 to 4 days. 

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With this bullish momentum, there’s speculation that the price of $UNI could surge to reach the $10 mark. Investors and traders are keeping a close eye on this potential uptrend, poised to capitalize on any favorable movements in the market.

Uniswap’s Potential 12.33% Surge to $8.47 by April 21

However, the latest Uniswap price forecast by Changelly is also optimistic. Analysts predict that it will increase by 12.33%. By April 21, 2024, this projection shows that Uniswap could be valued at $8.47.

Changelly’s technical analysis suggests a Neutral Bullish sentiment of 55% in the market for Uniswap. Also, the Fear & Greed Index has a score of 66, implying that investors are more prone to greedy behaviour.

Cryptocurrency experts, based their predictions on the price fluctuations observed at the beginning of 2023, predict that UNI’s average rate will equal $9.97 come April 2024. The expected price spread ranges from $9.81 at a minimum to $10.12 at a maximum value. This means an estimated return on investment (ROI) of up to 27.4% for those contemplating putting their money into Uniswap.

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Uniswap: $20M UNI Dump After SEC’s Warning Shot

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Uniswap became the latest to receive the SEC’s Wells Notice as the regulator began its clampdown against the DeFi industry. Although the Wells Notice is not a formal prosecution or regulatory enforcement document, it serves as an early warning of a planned enforcement action against projects deemed suspicious. Uniswap, in its response, vowed to take on the SEC head-on.

The Wells Notice did not specify reasons, necessitating Uniswap Labs to establish its innocence. However, Ripple received the SEC’s Wells Notice in December 2020, leading to its delisting from Coinbase. The move has sparked panic across the market. Data from Lookonchain revealed that three whales sold 2.03 million UNI [about $20 million], resulting in a roughly 17% drop [a near 50-day low] in the UNI price.

As netizens debate the next course of action, some speculate that the SEC will now attempt to go after the AMM’s liquidity provision and staking, claiming that there is an “expectation of profit based on the ‘efforts’ of others.” This seems to be the target. “They aren’t just trying to take down Uniswap. They are trying to take down DEFI as a whole. Their goal is clearly to make it so that ONLY incumbent institutions can be liquidity providers,” wrote one user.

Uniswap’s Epic Response to SEC: ‘We’re More Than Securities

The latest development comes just weeks after a judge dismissed the SEC for litigating against an on-chain, non-custodial wallet. Reacting to the significant escalation, the Uniswap team stated, “Despite SEC rhetoric that “most” tokens are securities, the reality is that tokens are just a digital file format The vast majority of tokens traded on Uniswap are definitively not securities, just like most paper is not stock certificates.”

Uniswap
Uniswap: $20M UNI Dump After SEC's Warning Shot 10

Once seen as the epitome of crypto decentralization, the Uniswap Protocol has handled more than $2 trillion in volume. “Numerous teams and developers have either forked our code or constructed upon it. We have established a fresh financial infrastructure that is transparent, equitable, secure, and inclusive, fueling an entire industry.” The team further signed off by stating, ” While our legal team takes on this fight, we’ll continue to do what we do best: build.”

Uniswap’s Layer-2 Breaks Through With $200 Billion Volume Surge

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Uniswap’s Layer-2 (L2) decentralized exchange (DEX) and automated market maker (AMM) network have set new records by breaking through $200 Billion transaction volume in February 2024. This impressive feat highlights the accelerating dominance as well as innovation of the platform in the blockchain ecosystem.

The latest data published by Dune, a top cryptocurrency analytics company, shows that Uniswap L2’s total protocol volume across various networks such as Arbitrum, Polygon, Optimism, and Base has set a new record at around $208.11 billion. The $75 billion volume seen in February 2023 is now left far behind with the $280 billion figure, which is representing a big leap in just 12 months. Additionally, the rise from February 2022’s figure of $13.9 billion is striking and demonstrates the exponential growth path of the platform.

Uniswap (UNI) Surges On Governance Optimism

High transaction volume has made the market to be bullish on UNI. The related proposal from the UNI Foundation on protocol governance reforms and protocol fee redirection to favor UNI token holders has been positively received. The proposal that is currently in voting until March 7 has already led to the strong growth in the value of UNI by 15 percent, and now the token is worth more than $13.08 as the community shows its support.

Although a slight pullback from its highest, UNI still remains strong, trading at $12.22, with a 5% increase in the last 24 hours. This atmosphere reflects the lively operation within the Uniswap ecosystem and the positive expectations for its upcoming developments.

The anticipation for Uniswap V4 is getting stronger and it should be released in the third quarter of this year. It will have a non-custodial, non-upgradeable, and permissionless model, and thus, it will only improve the platform. With the introduction of Uniswap V4 and other fee changes that favor Uniswap V2 token stakers, a huge 70% price spike in the UNI was registered on February 23, indicating the power of strategic improvements in market psychology.

The outstanding transaction volume of Uniswap and its positive side effects prove this platform’s thriving ecosystem and its significant role in the development of the Decentralized Finance (DeFi) sector. The platform’s expanding and diversifying products fuel the imagination of the crypto crowd and steer us to the vast potential of DeFi in the middle of the AI and other technological frontiers craze.

Uniswap’s Proposal Sparks 15% Surge In UNI Price: Report

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Uniswap Foundation’s plan to change the governance system has generated different reactions from the community. The initiative, which has gained much attention from all stakeholders, proposes distributing the protocol fee directly to the UNI token holders. In a recent X post, renowned crypto journalist Colin Wu, through WuBlockchain, has shed light on the key points, and Snapshot voting up to March 7 is coming under the microscope.

The very core of the proposal concentrates on the devised strategic redesign of the UniswapV3Factory contract on the mainnet. This technical fix is set to provide a greater extent of freedom and permissionless collection of protocol fee receipts. This is a technology upgrade and a philosophy shift towards providing UNI token holders with a more influential voice in decision-making. Such a shift hinted that Uniswap’s priority was decentralizing decision-making and strengthening its governance system.

The governance upgrade proposal has won by an immense margin since the beginning of the Snapshot poll, with the majority of the UNI tokens being cast in its favor. This voting trend clearly demonstrates that the community is in a common quest for transformative changes within the Uniswap system. It outlines an undisputable commitment to a governance model in which community participation is the key purpose and rewards are the end products.

Simultaneously with the release of the governance proposals, the UNI token has skyrocketed, marking a new high of $13.08. The exuberant 15% price increase is the market’s reaction to the proposed changes in governance. Investors and market followers have interpreted such a move as a bullish signal, which has underpinned their confidence in the company’s strategic direction and its implications for the broader ecosystem.

Uniswap’s Governance Proposal

The proposal announcement by the Uniswap Foundation is now a milestone in finding and implementing a more democratic and decentralized governance model. The support from the community reflected in both the NFT voting outcome and the extraordinary trade performance is a clear manifestation of the hunger for real governance reforms. It could create a ‘template’ for other decentralized projects to actively involve and incite their community members.

With the governance reform process already underway, the Uniswap community now has the opportunity to contribute actively to shaping the protocol’s future. Contribution to the Snapshot voting is no more than a democratic act but an opportunity to change the course of Uniswap’s destiny. Community members are invited to join the decision-making process, casting their votes and contributing to a continuous dialogue within the protocol and the wider cryptocurrency world.

Uniswap Revolutionizes DeFi With Three Major Releases Amid UNI Token Surge

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Uniswap, the renowned decentralized finance platform, has launched three revolutionary releases that allow users to make intelligent swaps. The trio comprises Uniswap Extension, Limit Orders, and Data & Insights tools, all of which seek to improve the swapping experience for cryptocurrency enthusiasts.

The Uniswap Extension is a giant leap forward in wallet convenience, and it lives right in the browser’s sidebar. This innovation ensures that users can swap coins without any interruption and, at the same time, sign transactions and manage crypto without interfering with their browsing experience.

For traders, Limit Orders would provide a new level of independence in managing their portfolios by being able to predefine prices and durations for transactions of token. For instance, on Ethereum, these can be placed with automatic trading that stretches throughout a year, without necessarily keeping one glued to their screens until the market hits its specified price.

On top of all that, new features in the complete Data & Insight package embrace access to real-time charts, transaction logs, and info on projects that are fully integrated directly into the platform. This, therefore, empowers its users with a bundle of information needed from research up to execution, united in one interface with lightning speed.

Surge In Uniswap’s UNI Token Amidst Governance Proposal

All of these have come at a time when interest on Uniswap is soaring high amid the extraordinary rise of UNI, the native token, from $7.15 to $12 on February 23, reaching its two-year peak. This came after the casting of an important vote, one where the Uniswap Foundation came up with a proposal for the distribution of protocol fees to UNI token holders who would actively stake and delegate their rights to use them in their favor.

As described by Uniswap Foundation Gov Lead Erin Koen in a recent tweet thread, this proposal is important because it describes how necessary improvements to governance mechanisms will help maintain Uniswap’s market leadership in the face of changing challenges.

This much-needed update is going to propel Uniswap further in its governance framework. This will make delegation a requirement for the staking of UNI tokens and receiving revenues. However, this will lead to a rise in community participation and help increase equity about power in the ecosystem.

These are just some of the developments that maintain the sleek performance that UNI has had in the market. It is currently trading at $11.17 with a 24-hour trading volume of $375 million. The price jumped 4.30% in the last 24 hours, whereas the chart for Uniswap’s weekly increase of 52% places it as a cryptocurrency force to reckon with.

UNI 7D graph coinmarketcap
CoinMarketcap

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