Uniswap V4 code was just released to the public.
Will this be the catalyst that reignites the DeFi giant?
Here’s your June 2023 investment analysis on $UNI.
Let’s dive in…
$UNI
Price = $4.63
DEX
Market cap = $3.5b – Rank 20
All time high = $44.92 (-90%)
All time low= $1.03 (350%)
Uniswap is one of the OG DeFi protocols. It pioneered the AMM concept and to this day is one of the most trusted and widely used decentralised exchanges.
A few days ago, the team announced the release of Uniswap V4. This has several huge updates including:
Hooks- allowing greater customization
Singleton structure- cheaper pool deployment
Flash accounting- simplify multi-hop swapping
Here is a great thread by @poopmandefi explaining the benefits of V4 in full detail.
https://twitter.com/poopmandefi/status/1671196917815189505?s=20
Revenue
Over the last 30 days, Uniswap has generated $38m in fees.
However, none of this revenue is currently distributed to token holders or the back to the protocol.
Daily fees are around $885k- the leading DEX by a big margin.
6.5 for Revenue.
Treasury
Uniswap has a significant Treasury with the following holdings:
TOTAL $1.93b USD
100% own token (422.5m $UNI)
There is no diversification and will be highly volatile. Still a sizeable treasury, despite the fact we are deep in a bear market.
9 for Treasury.
Tokenomics
The initial token distribution for the project was:
44.5% - Community
15.5% - Airdrop
18.65% - Team
18.64% - Investors
2.07% - LP Staking
0.71% - Advisors
The $UNI token is an ERC-20 token deployed on the Ethereum mainnet to propose and vote on changes to the protocol.
One of the biggest criticisms of its tokenomics is that holding the UNI token only has one benefit; influence over governance votes.
While this is important in it's own right, ‘real yield’ projects like GMX have shown the power of a shared revenue model.
As it stands currently, Uniswap is generating annualised fees of $413m, but none of that is going back to the protocol or token holders- it all goes to LPs.
Recently, there has been hot debate around the ‘fee switch proposal’.
Great summary of the current state of play by @sandraaleow.
https://twitter.com/sandraaleow/status/1661242547547828226?s=20
7.5 for Tokenomics.
Locked up funds
These are the current supply stats:
Circulating supply = 753m
Max supply = 1b
Market cap = $3.4b
FDV = $4.5b
Market cap/ FDV = 0.75
Currently, 75% of the total supply of tokens has been unlocked. All tokens are due to be vested by Sep 2024.
At first glance, current token holdings look fairly decentralized.
If you dig deeper using bubblemaps, you can see that a16z has about 4% of total supply- split between multiple wallets (green bubbles).
They have quite a lot of voting power as displayed in February this year.
Great thread by the @bubblemaps team who did some on chain sleuthing to discover this earlier in the year.
https://twitter.com/bubblemaps/status/1622295931117879301?s=20
8.5 for Locked up funds.
Use case
Total TVL is sitting at $3.9b– 4th overall and 1st amongst other DEXs.
Uniswap continues to be one of the most trusted and widely used decentralized exchanges.
While TVL is down over 61% from the bull market highs, it has stayed pretty consistent during the bear market and is forming a base around 3.5-4b.
9 for Use case.
Roadmap
There is no official roadmap released by the Uniswap team. The biggest focus will be working through v4 release:
Released the draft code now so that v4 can be built in public
Open feedback from community encouraged
Process to take months
There are also several interesting governance proposals being discussed:
Making Protocol Fees Operational
ARB airdrop proposals
Deploying Uniswap v3 to Filecoin Virtual Machine
8.5 for Roadmap.
7. Team & funding
Uniswap was founded by @haydenzadams in November 2018 and the token was launched in September of 2020.
According to LinkedIn, there are currently 130 employees at Uniswap Labs which is a sizeable team.
Uniswap started development with funding from an Ethereum foundation grant and has raised $176M through a seed round and two funding rounds.
Ethereum Foundation Grant (August 17, 2018) - $100k for DEX framework.
Seed Round (April 24, 2019)- ~$1M Paradigm
Series A Round (August 6, 2020)- $11M raised, led by Andreessen Horowitz.
Series B Round (October 13, 2022)- $165M raised, led by Polychain Capital.
8.5 for Team & Funding.
8. Summary
TLDR summary for each category’s score out of 10.
6.5 - Revenue – $38m fees over 30 days (none to token holders)
9 - Treasury– $1.93b in Treasury
7.5 - Tokenomics – UNI governance token, no revenue for holders
8.5 - Locked up funds – 75% tokens in circulation
9 - Use case – $3.9b TVL, 1st amongst DEXs
8.5 - Road map – Uniswap v4 announced
8.5 – Team & funding – Doxxed team, $176m in funding
TOTAL- 8.0 weighted avg. score.
Uniswap is one of the founding protocols for DeFi and will hold a special place in all degens hearts.
The question is, can it:
Continue to innovate and stay the most widely used DEX
Ensure it implements long-term sustainable tokenomics that benefits the community.
The purpose of this thread is for education and research- not financial advice. I am not a paid advisor or ambassador of Uniswap.
Always DYOR before Apeing in. Here is a framework I prepared earlier.
https://twitter.com/jake_pahor/status/1603039685609152515?s=20&t=7ffpmNn4CGlUR9pBxRWpvA
The current macro conditions are still very choppy so stay safe out there frens.
