Yerevan (CoinChapter.com) — UNI, the native token of Uniswap, a decentralized finance (DeFi) exchange, continued to climb during the early European session Wednesday as UniSwap’s weekly trading volume hit a new milestone.
The UNI/USD exchange rate reached as high as $33.54, up 4.85 percent from the intraday opening rate. Traders used the local top to secure their near-term profits, causing the price to correct lower. Nevertheless, UNI maintained its overall bullish bias for the day.
The upside move in Uniswap’s token market primarily appeared after Hayden Adams published the latest results of their weekly trading volume. The Uniswap creator noted that their week-to-week trading volume crossed the $10bn-mark. A higher trading volume contributes to the overall demand for UNI tokens.
Mr. Adams noted that posting $10 billion per week worth of trading volume would mean up to $0.5 trillion a year worth of trades at Uniswap annually (if the volume growth manages to stay on the current trajectory).
The upside move in the Uniswap market followed four days of consecutive declines. Earlier on April 15, the UNI/USD exchange rate established its record high of $40.47 (data from Binance). The peak — again — attracted traders to secure their profits, causing the token to drop to as low as $26.63.
What’s Driving UNI Upward?
Uniswap is now one of the most efficiently emerging Automated Market Makers (AMM) protocols. It is one of the leading decentralized exchange (DEX) platforms.
Initially, Uniswap was a proof-of-concept (POC) on the Ethereum blockchain. As Ethereum is infamous for its high gas fees (fees required for a certain transaction), Uniswap came forward with an alternative solution. It announced that it would launch a so-called Uniswap V3 protocol on May 5th.
The new upgrade proposes to increase capital efficiency and introduce better trade execution quality to the project. Overall, the features that were missing in the previous version.
Read More about UniSwap V3: Uniswap Weeks Away from V3 Upgrade; Good News for UNI Bulls?
History shows that UNI reacts positively to higher trading volumes on the Uniswap exchange. For instance, the token reached $34.8, its highest level to date, after Uniswap processed over $100 billion in volume back in Feb 2021. So it appears, the V3 update has provided additional support to the ongoing UNI price rally.
“Given that Uniswap seems to be setting itself up to become the back end of future centralized exchanges, it does not surprise me that they’re putting things in place to make your Uniswap’s market less chaotic,” said Selcuk Aslantas, a contributor at Coinmonks, a non-profit Crypto educational publication.
With the launch of the V3 protocol and Uniswap continuing its successful growth, traders expect more sustained periods of growth for UNI, if the past is any indication.