Uniswap (UNI) is the main governance token of Decentralized-Finance’s (De-Fi’s) leading decentralized-exchange (DEX). It is traded, farmed, and invested in – by many. But how big of a market cap does Uniswap have and how does it influence prices?
To summarize, marketcap is short for market capitalization and represents a metric that tracks the relative value of a cryptocurrency, stock, or company.
You can calculate the marketcap of anything just by multiplying the current market price of an asset with the total number of tokens or coins in circulation.
According to crypto data market aggregator CoinGecko, Uniswap (UNI) only had a marketcap worth $200 million when it launched in September.
However, the situation drastically changed only after a couple of days. On September 19, the Uniswap (UNI) marketcap had already exceeded more than $700 million. This trend declined for the next few weeks. However, the marketcap reached $700 million again on October 4.
Since then, the marketcap of Uniswap never recovered and started to quickly decline. At the time of writing, the governance token’s marketcap stands at $484 million. This fell simultaneously with the asset’s price, which decreased from $7 to $2.27.
If De-Fi recovers at some point, it may lead to more money coming into DEXes like Uniswap. Until then, the market will slowly continue to fall while investors slowly reinvest in fundamentally sound cryptocurrencies like Bitcoin and Ethereum (ETH).
How Else Can We Track the Performance of Uniswap Apart From Marketcap?
Prices and marketcaps are not the only data points that you should consider when trading Uniswap (UNI). There are a number of fundamental metrics that you should track and the most crucial one could be Total Value Locked (TVL).
One factor that makes De-Fi tokens stand out is that you can provide liquidity with them. Therefore, it is extremely important to note how much liquidity a token or DEX holds. After all, it represents the active amount of collateral that users have locked in the protocol.
De-Fi market data provider De-Fi Pulse allows you to see the TVL of the leading projects in decentralized-finance. In the case of Uniswap, De-Fi Pulse reveals that the TVL metric is at an all-time high (ATH).
Right before the UNI governance token launched, Uniswap only had $748 million in locked collateral. Shortly after, the TVL jumped to $1.96 billion on September 19th.
The amount of locked assets has fallen for the first few days, but it continued to rise shortly thereafter.
At the time of writing, Uniswap hosts around $2.74 billion in collateralized assets, more than any other DEX. The TVL metric may be at a strong resistance but it still shows that Uniswap is healthier than ever – despite its decreasing marketcap.
Ultimately, TVL shows how active users are on a certain project. If there is a demand for the Uniswap DEX, there will surely be demand for its UNI token as well.
However, the fate of UNI and all other altcoins are determined by the market movements of larger players. These include cryptocurrencies with a higher marketcap such as BTC and ETH. If these market-leading digital assets do not establish a new bull-run, it is hard to believe that De-Fi will resume its exponential growth this year.