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The price of UNI gains 25% in the last 24 hours as the Uniswap liquidity pool crosses $2Billion
The uniswap liquidity pool crossed 2 billion USD this week and as a result of which, the UNI price soared by 25% in the last 24 hours. After the termination of the UNI farming program in November, the market cap of Uniswap reached $2B for the first time. UNI farming program was very popular across the crypto players and enthusiasts, which offered great returns for the traders who added liquidity to the Uniswap pools. But, this farming program has a limited life span and it ended in November. The termination of this UNI farming program lead to a 45% plunge in the liquidity of Uniswap.
Decentralized Finance (DeFi) is the best use case of blockchain and the cryptocurrency space. Before the advent of cryptocurrencies, the term passive income was not so frequent in the market. Even after the cryptocurrency entered the market, the major way to earn income was to trade or mine cryptocurrencies which required a lot of computational power and market analysis. But, DeFi protocols have cultivated the idea of passive income in the minds of traders. The concept of offering liquidity to the pools and getting rewarded with tokens in return really attracted a lot of traders.
Before the termination of the UNI farming program, the liquidity of Uniswsap liquidity pools reached an all-time peak of $3.3 billion. Soon after the end of the program, the liquidity started falling. And this current rise is due to the rising ETH price. Ethereum, the second-largest cryptocurrency after Bitcoin, has reached higher market caps. Noe Ethereum is traded at $747 breaking the key resistance of $700 after more than two years.
This rising liquidity and the price of ETH makes the price of UNI rise by 25% and is currently at a daily high of $4.69. UNI ranks third among the DeFi tokens with a trading volume of $926 million. Though the market dominance of uniswap has reduced after the termination of the UNI farming program, Uniswap still is at the peak of popularity and it generates more volume than many of the centralized exchanges combined.
Though Uniswap is new to the DeFi industry, it has got great potential to go mainstream in 2021 with a huge number of use cases in trading and banking systems.