KyberSwap loses $46M in a massive security breach, with its TVL plummeting. Can it recover from this devastating hit?
- Starting October 17th, Uniswap is implementing a new fee for specific swaps conducted through its web interface and wallet.
- The 0.15% fee will apply to ETH, USDC, WETH, USDT, DAI, WBTC, agEUR, GUSD, LUSD, EUROC, and XSGD.
Uniswap Introduces 0.15% Swapping Fee for Wallet and Web
It’s important to note that this fee is distinct from the Uniswap Protocol fee, determined through UNI token governance, as Uniswap founder Hayden Adams explained.
This new fee comes in addition to the existing liquidity pool fees of 0.3%.
It is expected to complement the protocol fee, projected to increase from 0% following a governance vote.
Given Uniswap’s current trading volumes, the new token fee will generate approximately $1 million daily revenue.
The specific pairs mentioned earlier generated approximately $580 million daily trading volume, resulting in around $870,000 in swap fees.
As trading volume stabilizes after the initial surge, it is anticipated that the weekly volume from the 0.15% swap fee will amount to ~$800,000, contributing to an annualized revenue of approximately $42M.
As a result, the trading volume decreased by ~24% in the last 24 hours. The same with the fees, they lowered by ~22%, while the TVL decreased by another ~1.4%.
It seems like Uniswap will lose some clients on this move, but the customer base of this DEX is so big and loyal that it won’t even put a dent in their economics in the long run.
What Is Uniswap?
Uniswap represents a distinctive exchange category characterized by its complete decentralization, meaning it lacks ownership and operation by a single entity.
Instead, it employs an innovative trading model known as an automated liquidity protocol.
Established in 2018 atop the Ethereum blockchain, Uniswap boasts compatibility with all ERC-20 tokens and associated infrastructure.
What sets Uniswap apart is its open-source nature, allowing anyone to replicate its code and create their own decentralized exchanges.
Moreover, Uniswap permits users to list tokens on the platform without incurring fees, a sharp contrast to profit-driven centralized exchanges known for their exorbitant listing fees.
Uniswap ensures users retain constant control over their funds. This contrasts with CEXs that require traders to surrender control of their private keys for order logging in an internal database.
This approach significantly mitigates the risk of asset loss in a hack. If you want to know more about how hacks steal money from CEXs, we have an article covering the recent HTX hack.
How Does Uniswap Work?
Uniswap operates through two smart contracts: the “Exchange” and the “Factory” contracts.
These are automated computer programs meticulously crafted to execute predefined functions upon meeting specific conditions.
In this context, the factory smart contract is pivotal in incorporating new tokens into the platform.
In contrast, the exchange contract is the intermediary for all token swaps, often called “trades.”
Notably, Uniswap accommodates the exchange of any ERC20-based token with another, offering a versatile and comprehensive trading experience.
Do you think Uniswap will retain its massive popularity after introducing a new set of fees? Judging from the trading volume, people still use it as the most popular DEX out there…