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Uniswap Slingshots 45% – Can UNI Blaze Past Its 7-Day Rally?

Uniswap is once again hogging the headlines following the token’s comeback in the wake of optimistic signs that the bear market may be winding down.

In the past week, UNI, its native token, has seen enormous growth, as the decentralized exchange’s trading volumes have rivaled those of Ethereum, the blockchain on which it is constructed.

Multiple news agencies stated that Uniswap had exceeded the Ethereum network in terms of transaction fees. The flagship DEX collected more than $4 million, surpassing the second-largest blockchain.

UNI increased by roughly 45 percent in the last week, reaching $5.46, its highest level in more than three weeks.

Uniswap Making Northbound Trajectory

The biggest DeFi exchange has been trending upward since the beginning of the week. Looking at the price trend over the last few days, it appears that UNI’s main objective is to close June on a positive note.

In addition, the stockpiling of UNI tokens by whales is a significant component in the token’s price bump.

After a debilitating first half of the year, rising fees on Uniswap may be an indication that the DeFi market is beginning to recover.

UNI total market cap at $4.14 billion on the weekend chart | Source: TradingView.com

This year, total value locked (TVL) in DeFi has shrunk by more than 60 percent, according to data from DeFi Llama.

Katie Talati, an analyst at Arca, attributes the DeFi exchange’s most recent accomplishment to quickly increasing volatility, which led to a substantial increase in trading volumes.

Simultaneously, Ethereum has witnessed a significant fall in user activity, whereas layer-2 solutions are gaining popularity because of their low transaction fees.

UNI Facing Bullish Momentum

Uniswap is among those that have benefited from the recent market restoration, having lately attempted a price turnaround. UNI is up 2% in the last 24 hours, which is a significant increase for the token since it dropped to $3.39 during the last slump.

Faced with the continued bullish advance, there is no selling opportunity for bears in the $5.8 to $6.2 resistance zone, which has been in place for more than 30 days and has been repeatedly retested.

Although bears are still prominent in the bull market, bulls do not wish to relinquish their UNI token holdings.

This year, Uniswap has lost less than 50 percent of its total value locked (TVL). This week has also seen modest inflows, with the TVL increasing by 11 percent to $5.1 billion.

Enhanced participation with Ethereum Layer 2s may contribute to the exchange’s rising popularity. Already embraced by major organizations like Polygon and integrated into other Ethereum-based applications, Uniswap has a large user base.

Featured image from Cryptokio, chart from TradingView.com

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Uniswap Launches Product In The Midst Of Lawsuit, UNI Reacts To The Downside

Uniswap’s governance token UNI has been trending to the downside following the general sentiment in the market. The token records a 2% loss during the last day as two major events take UNI holders’ attention and could suggest more downside price action for the short term.

Related Reading | Uniswap Registers Yearly Low: Vital Trading Levels To Follow

At the of writing, UNI trades at $9.4 with a 6% loss in the past 7-days.

UNI is trending to the downside in the 4-hour chart. Source: UNIUSDT Tradingview

Yesterday, news broke about a class action lawsuit against this decentralized exchange (DEX) developer Uniswap Labs, its inventor Hayden Adams, and other major investors in the project. Filed as a class action in the Southern District of New York with Nessa Risley representing the plaintiffs.

These people are suing Uniswap Labs and others claiming that they have “unlawfully promoted, offer, and sold unregistered securities” on the DEX. In addition, they claim that Uniswap’s lack of a Know Your Customer (KYC) policy has enabled alleged cases of fraud without the DEX taking measures to prevent these supposed activities.

Furthermore, the plaintiff claims the DEX and the defenders have benefited from “undisclosed fees” collected on “every transaction” executed with the platform in an alleged violation of the U.S. Securities laws, according to the document. The plaintiffs also accused the platform of selling scam tokens.

These include Rocket Bunny, BoomBaby.io, Matrix Samurai, EthereumMax, and others. The plaintiffs claimed these tokens failed to file a registration with the U.S. Securities and Exchange Commission (SEC).

Uniswap is a decentralized exchange running on Ethereum and operating under a governance model controlled by UNI holders. Unlike centralized exchange it is permissionless, and its smart contracts respond to no centralized authorities for the benefit or detriment of any party.

According to the document filed with the court, Risley and the other plaintiffs were not familiar with Uniswap. At least, the document suggests they have little experience trading on the platform before incurring alleged “substantial losses” which led to their lawsuit.

Uniswap lawsuit has me rolling.

She needed consistent disclosures to figure out that "Rocket Bunny Token" and "BoomBaby" and "Matrix Samurai" were not legitimate, sensible investments.

💀💀💀 pic.twitter.com/N1qq8uoZnz

— Cobie (@cobie) April 14, 2022

Uniswap Releases New Product

Less than 24 hours after the class action was filed, Uniswap Labs launch a Swap Widget feature to allow users to “seamlessly swap tokens anywhere across the web”. The dApp is accessible via certain platforms, such as Open Sea and Oasis.

1/✨ Today, we're excited to announce the launch of the Swap Widget which allows users to seamlessly swap tokens anywhere across the web 🙌

Find the Widget already on your favorite apps like @opensea, @FWBtweets, & @oasisdotapp pic.twitter.com/SzQ95t5sEs

— Uniswap Labs 🦄 (@Uniswap) April 14, 2022

The product is part of an Uniswap expansion initiative which is aim at providing “everyone” with access to “fair, open, and transparent markets”. The Widget is supposed to be easy to integrate by developers as it would only require “one line of code”.

Related Reading | Ethereum At $3028, Where Is The Next Critical Support Level For ETH?

The Uniswap community has positively reacted to the announcement. However, the DEX’s native token has trended to the downside, likely due to its correlation with Bitcoin and other larger cryptocurrencies.

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Uniswap Registers Yearly Low: Vital Trading Levels To Follow

The broader crypto market jolted hard owing to the tension between Russia and Ukraine. Uniswap broke below its crucial support level and was priced at $8.32. Bitcoin slid off its charts at press time, after noting a 9% depreciation. The crypto market had barely recovered from the December crash.

With the Russia and Ukraine tension intensifying most altcoins have again lost much of their strength. Uniswap for instance at the current price level flashed a yearly low too.

Uniswap had registered an all-time high of $45 in the month of May, last year post which the coin continued to dip on its charts. The coin breached its long holding support level of $12.65 and broke below a series of resistance lines.

Related Article | Bloomberg Strategist: This Is The Defining Moment To Buy Bitcoin

Uniswap Price Analysis: Four-Hour Chart
Image Source: UNI/USD TradingView

Uniswap was priced at $8.32 and was closing near its immediate support level of $7.87. In the last 24 hours, UNI lost 7% of its value and over the last week, the coin had shed almost 24% of its value. The coin had tried to consolidate near its $12.65 support line, post which UNI continued to move in a downtrend.

After the coin breached the aforementioned support line, UNI had tried to hold itself above the price floor of $8.36, however, the coin broke below the $8.36 price mark. Uniswap had also tried to bounce back from the $8.36 and touch the $9.26 price mark.

If the coin continues to trade beneath the $10.01 price floor, which UNI had retested a couple of times then there could be chances that UNI would dip below the support level of $7.87.

The coin has remained under brought for almost one week now, forcing the coin to touch a yearly low. The last time UNI traded at this price mark it was in the month of January 2021. A fall from the $7.87 would push UNI to trade between the $6 and $5.88 price levels.

Rationale

The technical outlook of Uniswap was quite bearish at the time of writing, over the past week UNI had displayed a consistent bearish outlook. Ever since UNI started dipping down from the $10.01 support line, buyers started to exit the market.

Related Reading | Russia Can Avoid Sanctions By Using A Wide Range Of Cryptocurrency Tools

The aforementioned situation had pushed the UNI to the oversold area. The Relative Strength Index was parked underneath the half-line, which indicated that buying strength was absent in the market and selling pressure dominated the coin. Although RSI had noted a slight uptick, at press time the indicator again started to side with the bears.

UNI was trading beneath the 20-SMA line, which is indicative of a bearish outlook. The sellers in the market were responsible for driving the price momentum of the market.

MACD underwent a bearish crossover and the coin started to depict red histograms at the time of writing. This reading meant that the market trend continued to act in accordance with the bears in the market.

 

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Community Voted, Why Uniswap Will Be Deployed On Polygon

Popular decentralized automated market maker (AMM) Uniswap will deploy its smart contracts on Polygon, the Ethereum scaling solution, Proof-of-Stake (PoS) chain. The announcement was made via Twitter by the official handle of Uniswap Labs after the completion of a community vote.

Related Reading | Uniswap Community Reacts Against The New Proposal, Here is Why

The AMM will be rollout on Polygon on its third iteration (V3), per the initial proposal. The motion was passed with 72 million votes in favor and 503,009 against which suggest the proposal has wide acceptance within UNI holders.

🗳 The Uniswap community has voted to deploy v3 on @0xPolygon through the governance process.

⚡ Uniswap Labs will deploy Uniswap v3 contracts within a few days.

👀 Stay tuned. pic.twitter.com/LwVLwEngPl

— Uniswap Labs 🦄 (@Uniswap) December 18, 2021

Presented on November 19th by Mihailo Bjelic, one of Polygon’s co-founders, claiming it’s “the right moment” to carry on this community driven initiative. Bjelic claimed Polygon has one of the “strongest DeFi ecosystem”, that the implementation could boost Uniswap’s user base, and promised users that they will incentive adoption to achieve that goal.

We initiated the final phase of the governance process – On-chain Vote: https://t.co/PcHcnrcj2u.

If the vote passes, the deployment is officially approved. 🤗

Huge thanks to the Uniswap community for the overwhelming support so far!

Let's make this happen! 🦄💫 https://t.co/RePmCRaBlb

— Mihailo Bjelic (@MihailoBjelic) December 10, 2021

As a scaling solution for Ethereum, Polygon can also provide users with a “battle-tested” and cost-efficient implementation of the popular AMM. In the DeFi ecosystem, Uniswap ruled supreme until high transaction fees price-out a large number of users from the protocol.

As Bjelic pointed out, other major Ethereum protocols have chosen Polygon as their preferred scaling solution. The co-founder mentioned Aave, Curve, SushiSwap, Balancer, and others while adding the following on the advantages of Polygon and its ecosystem:

Besides the impressive number of deployed projects, additional strength of Polygon’s DeFi ecosystem is that it is already self-sustainable. We effectively stopped all liquidity mining incentives some time ago, and yet we keep seeing capital and user inflow 25 and very high user retention 14.

Additional data provided by Bjelic claims that protocols deployed on Polygon experience an increase in their use base. After their implementation on this network, Aave reached 700,000 actives users, a 10x increase when compared to the same metric on Ethereum.

Uniswap And Polygon To Onboard Thousands Of New Users?

Of course, most users expect the implementation on Polygon to decrease the cost of usage for Uniswap. The co-founder of this scaling solution claimed that Aave also experienced a 16x increase in its user’s activity.

Bjelic further argued that the integration between Uniswap v3 and Polygon’s PoS will represent a comeback to the original “DeFi vision”. This sector was created to provide people with open, and inclusive financial solutions. He added:

DeFi is envisioned as an open, inclusive financial system, so deploying to Polygon (and other scaling solutions) can be considered as returning to this original vision.

Polygon will explore the possibility to commit around $20 million from their treasury to create liquidity incentives. The project abandoned this practice, but Bjelic claimed they are willing to resume for Uniswap due to its importance as one of the flagship DeFi protocols.

The funds will be distributed as follow: $15 million might be allocated for long term liquidity incentives and $5 million for a “special purpose DAO”. The goal of this organization will be to increase Uniswap adoption on Polygon.

Related Reading | Uniswap Labs Limits Access To Certain Tokens, What It Could Mean For The DeFi Sector

As of press time, UNI trades at $15,99 with 10.3% profits in the past day.

UNI trends to the upside in the 4-hour chart. Source: UNIUSDT Tradingview

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UNI Price Slides Due To SEC Investigation, In Risk Of Deep Plunge?

The decentralized nature of Uniswap (UNI) will be put to the test. Earlier, it was revealed that the Securities and Exchange Commission (SEC) opened an investigation on Uniswap Labs, the company behind the protocol.

Immediately after the news broke out, the price of UNI, Uniswap’s governance token, took a hit and dropped as much as 4%. Meanwhile, the main cryptocurrencies in the top 10 showed strong gains.

Bitcoin managed to climb above the $50,000 mark with a 2.7% profit in the daily chart, and Ethereum went north of $4,000 for the first time since May’s crash. ETH trades at $3,986, at the time of writing, with a 6.1% profit.

ETH is on a strong bullish trend in the daily chart. Source: ETHUSD Tradingview

UNI’s price stands at $29,09, and it’s the worst-performing asset in the crypto top 10 by market cap with a 2.1% loss in the daily chart.

UNI with minor losses in the daily chart. Source: UNIUSDT Tradingview

In the crypto community, many remember XRP’s price reaction to the SEC action filed against Ripple Labs, and two of its executives. At that moment, XRP was the third cryptocurrency by market cap and was following the bullish sentiment in the market.

As 2020 was coming to an end, so it did XRP’s upside momentum. The SEC killed the push and XRP plunged, presenting heavy losses for a couple of months.

It’s unclear if UNI will follow, up until now the token showed conviction to break above major resistance at $30. The governance token was trading in the $25 – $30 range. Thus, experts claimed that this was the last obstacle before it can drive a fresh rally.

Source: Skanks Futures (@skanksfutures) via Twitter

UNI’s indicators point to further appreciation but could flip negative/neutral in the coming days. The Relative Strength Index (RSI), an indicator to measure momentum, for the governance token stands at 56.7 or neutral, at the time of writing.

In the short term, it seems critical that UNI breaks the $30 resistance. If the rest of the market makes a strong push to previous highs, UNI’s price could benefit. In that sense, Bitcoin and Ethereum performance are critical.

Uniswap (UNI) A Battle For The Whole Crypto Industry?

The rumors about a possible SEC investigation on Uniswap Labs have been circulating for some time. As NewsBTC reported, the software development studio limited access to certain tokens via the app.uniswap.org domain.

Some speculated that this decision was made due to pressures from the Commission. In addition, SEC Chair Gary Gensler seems determined to “put DeFi under a microscope”. Compounds Labs General Counselor Jake Chervinsky comment the following on recent events:

(…) it shouldn’t surprise anyone who’s seen Chairman Gensler’s recent comments on DeFi. It also shouldn’t worry anyone too much (yet). An investigation is *not* an allegation of wrongdoing, it’s just how SEC gathers information.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

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Uniswap Labs Limits Access To Certain Tokens, What It Could Mean For The DeFi Sector

Software development studio Uniswap Labs (UL) announced the restriction of certain tokens via the app.uniswap.org domain. The company claims to be taking part in “creating a better” financial system and has taken the decision after reviewing the regulatory landscape and the actions of other “DeFi interfaces”.

The token removed from the domain represented a “very small portion of overall” trading volume on the platform, UL claims. Amongst the restricted tokens is Gold Tether (XAUt), Grump Cat (GRUMPY), iAAVE, iADA, iBNB, sAPPL, sCOIN, and many more related to options, tokenized stocks, and securities from traditional companies.

The software studio clarified that the Uniswap Protocol is a separate entity from the interface accessible via the app.uniswap.org domain.

(…) It provides unrestricted access to anyone with an Internet connection. Similarly, this action has no impact on the Uniswap Interface code, which remains open source, or the many other portals or locally run instances used to access the Uniswap Protocol.

The same clarification was made by Hayden Adams, inventor of the protocol, via his Twitter account. After receiving a lot of criticism for their decision, Adams reminded his followers about the difference between Uniswap Interface, the open-source GPL code, app.uniswap.org, the domain, and Uniswap the protocol.

Later, he added that true decentralization “doesn’t mean UL lets you do whatever you want on its website”, but that users can access the protocol via other interfaces. He added:

(In my opinion) the Uniswap Protocol remains the most decentralized of the top defi protocols by a wide margin. Why: Non-upgradable and permissionless smart contracts, w/ no admin keys or ability for UNI holders to steal underlying liquidity.

Is Uniswap Labs Trying To Prevent A Government Crackdown?

Of course, Adam’s statements caused different reactions across the crypto community. Stanislav Kulechov, a founder of decentralized protocol Aave, said that “DeFi front-ends should” be hosted on the InterPlanetary File System (IPFS).

In that way, the protocols can be “less dependent on the founding team” and maintain their decentralization. Kulechov also proposed a Bring-Your-Own-Front-End (BYOF) solution that would allow users to download the software into a device to access the protocol.

Gabriel Shapiro, General Counselor at Delphi Labs, pointed out the possibility that anyone who forks the Uniswap front-end could receive a lawsuit from the software development studio UL. Shapiro said that the company “like DMCA (Digital Millennium Copyright Act) takedown requests”.

In a different post, Shapiro addressed the rumors suggesting that UL and other DeFi projects received subpoenas from the Securities and Exchange Commission (SEC).

A few days ago, Senator Elizabeth Warren send a letter to the SEC Chair, Gary Gensler. Warren requested clarity on regulations regarding cryptocurrencies, stablecoins, and DeFi with a deadline set for July 28th, 2021, for Gensler to replied.

Many argued that UL decision could be related to that event and to the aforementioned subpoenas. Shapiro doesn’t completely rule out this possibility but claims that they only rumor to be taken with a grain of salt.

At the time of writing, UNI and other major DeFi tokens haven’t reacted to these events. Uniswap’s governance token trades at $18,17 with a 4.1% in the daily chart.

Uniswap UNIUSDT
UNI with small losses in the daily chart. Source: UNIUSDT Tradingview
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Controversy Over Uniswap $20M Grant To “DeFi Education Fund”, Failed Governance Model?

There has been a lot of debate around decentralized exchange Uniswap and the DeFi Education Fund (DEF).  This entity received $20 million or 1 million UNI, the protocol’s native governance token, to be lobby and increase the DeFi sector level of adoption. The funds are to be liquidated in 4 to 5 years.

The proposal to created DEF was introduced by the Harvard Law Blockchain and Fintech Initiative (HLSBFI), a student organization dedicated to developing this institution’s students’ knowledge on blockchain technology and the FinTech ecosystem.

About a month ago, the DEF sold 500,000 UNI ($10 million) aided by crypto exchange Genesis, via an Over the Counter (OTC) deal. After this tweet, all hell broke loose, and many went to said that the organization was “looting” Uniswap’s treasury.

In a Medium post, the DEF argued that regulatory Dynamic and the “state of global policy proposals”, should keep a level of flexibility and speed to spend the funds. Thus, they converted them into USDC. The money will still be used to begin their work and set up future operations, the organization said:

(…) we expect the vast majority of DEF’s expenses will be dollar-denominated, the UNI funds must be diversified into dollars. Diversifying half of the 1M total allocation provides the DEF with a sustainable budget to weather any market downturns and allows the DEF to rapidly get to work.

They claim that regulations in the U.S. and Europe are DeFi’s greatest threat. Thus, they are allegedly preparing for the possibility that regulators in these regions stripped DeFi protocols and their community from liberties to which they have “become accustomed”.

Has Uniswap And Other DeFi Protocols Governance Model Been Compromised?

Partner at Cinneamhain Ventures, Adam Cochran, summarized and expressed most of the concerns from the Uniswap and crypto community. Cochran classified the process as a “big botch” with failures in transparency and communications from the DeFi Education Fund.

In addition, he questioned the way that this entity liquidated half their funds and suggested that “DeFi savvy people” will find a better use for them. According to Cochran the $10 million are “sitting idle in a wallet” when they could lock the UNI in Compound, Aave, MakerDAO, or other DeFi protocols for a yield.

The expert added that the initial proposal should have included a vesting period for the funds. Cochran said:

Uniswap gave $20M to an unsupervised group, over which no one has any governance authority, who has already made questionable judgements, has poor defi practices, and even when called out provide unprofessional communications with weak arguments to their position.

Later, he concluded that the DEF has failed “so far” at core tasks, represent the Uniswap community, understanding DeFi, and in the proper administration of their organization. Cochran added:

This should serve as a call for all DAOs to seriously evaluate their governance models and should also raise into question the large delegations that VCs have given to student organizations.

In that sense, Cochran believes that DAO governance still has a long way to go to refine its voting and governance processes.

At the time of writing, Uniswap (UNI) trades at $18,05 with a 2.3% loss in the daily chart.

Uniswap UNI UNIUSDT
UNI trends to the downside in the daily chart. Source: UNIUSDT Tradingview
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Charted: Uniswap’s UNI Sets New ATH At $45, Why It Could Extend Gains

Uniswap’s UNI gained momentum and traded to a new all-time high near $45.00 against the US Dollar. The price is likely to continue higher above $45.50 and $46.00 in the near term.

  • UNI started a fresh increase after forming a base above the $40.00 level against the US dollar.
  • The price is trading nicely above $42.00 and the 100 simple moving average (4-hours).
  • There was a break above a major contracting triangle with resistance near $40.00 on the 4-hours chart of the UNI/USD pair (data source from Kraken).
  • The pair is likely to continue higher if it clears the $45.00 and $45.50 resistance levels in the near term.

Uniswap’s UNI Gains Traction

After forming a support base above $40.00, UNI started a fresh increase. The last swing low was near $39.30 before the bulls pushed the price above the $42.00 resistance.

There was a break above a major contracting triangle with resistance near $40.00 on the 4-hours chart of the UNI/USD pair. The pair broke the $43.00 and $44.00 resistance levels. A new all-time high is formed near $45.05, with a bullish angle, unlike bitcoin and just like ethereum.

The price is now trading nicely above $42.00 and the 100 simple moving average (4-hours). An immediate support is near the $43.70 level. It is close to the 23.6% Fib retracement level of the upward move from the $39.30 low to $45.05 high.

Uniswap’s UNI

Source: UNIUSD on TradingView.com

On the upside, the price is facing hurdles near $45.00. A close above the $45.00 level could open the doors for a more gains in the near term. The next key resistance could be near $46.50, above which the bulls are likely to aim a test of the $50.00 level.

Dips Supported?

If UNI price fails to climb above $45.00 or $45.50, it could correct lower. The first major support is near the $43.70 and $43.50 levels.

The main support is now forming near the $42.00 zone. It is near the 50% Fib retracement level of the upward move from the $39.30 low to $45.05 high. A downside break below the $42.00 support might open the doors for a push towards the key $40.00.

Technical Indicators

4-Hours MACD – The MACD for UNI/USD is gaining momentum in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for UNI/USD is well above the 60 level.

Major Support Levels – $43.50, $42.00 and $40.00.

Major Resistance Levels – $45.00, $46.50 and $50.00.

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This is why Uniswap v3 could have “insane efficiency”

With a tentative deployment date set for May 5th, 2021, the third iteration of decentralized exchange Uniswap is amongst the most hype projects in the crypto space. Its newest features offer its user more flexibility to leverage earning strategies.

However, the creator of Uniswap, Hayden Adams, claims there is much more to the update. Via his Twitter account, he showed the DEX’s new equation to calculate efficiency and said:

I don’t think the insane efficiency of Uniswap v3 has sunk in yet. Over the past 3 months (Jan8-present) the price of ETH/BTC has ranged from 0.0295 to 0.0454 Plugging into the formula, we find it is 9.8x more efficient than v2.

Comparing the second to the soon-to-launch iteration of Uniswap, Adams highlighted other advantages for the users, like the reduction in the amount of capital required to provide liquidity.

The liquidity providers (LP) will also be able to participate in a specific range for a trading pair to receive trading fees with the “same amount of impermanent loss”. Adams added the following example:

the Uniswap v2 WBTC/ETH pair has $318m in it. If WBTC/ETH LPs instead provided to the range of 0.0295 and 0.0454 on v3 they could create the same amount of liquidity and take on the same amount of impermanent loss with just 318/9.8 = $32m.

Uniswap v3 will be over 10x more efficient

In a post title “The Dex to Rule Them All”, researcher Will Sheehan”, go deeper into Uniswap v3. Claiming that this update will “change” the dynamics in active and passive LP. Therefore, minimizing and creating a better balance between all the users.  Adam added:

Efficiency is just a means to an end – the result of concentrated liquidity is offering far better execution rates and giving LPs more desirable positions. How much better will they be once v3 is live? These things can be hard to predict. But i have a good feeling.

UNI is trading at $29,62 with 3.4% gains in the daily chart. Over the week, the governance token has 5.6% gains and 11.5% losses in the monthly chart. With over $15 billion in total market cap, UNI managed to break into the top 10, surpassing Litecoin and Chainlink.

Uniswap UNI UNIUSDT
UNI with moderate gains in the 24-hour chart. Source: UNIUSDT Tradingview
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Can Uniswap v3 prevent forks? Top lawyer breakdowns its license

After the release of Uniswap v2 in May 2020, several competitors for the DEX emerged, forking its codebase, launching new incentives, and their own governance model to attract users. Sushiswap is perhaps the most important.

To prevent something similar, the third iteration of the automated market maker will be released with a Business Source License 1.1. The license will expire after two years unless the community decides to accelerate its expiration. It will then adopt a GPL 2.0 open-source license.

With a tentative deployment date of May 5, General Counsel for Compound Finance, Jake Chervisnsky, believes it is possible that Uniswap v3 could prevent further forks, for a trade-off.

Chervinsky señala que es importante que los protocolos de finanzas descentralizadas operen con licencias de código abierto. Sin embargo, indica que la licencia de negocio de Uniswap no será “inútil” como muchos piensan. El experto afirmó:

This is where people say “good luck enforcing copyright against anon devs,” as if Uniswap’s BSL 1.1 license is useless. Wrong, for a few reasons. First, most dev teams aren’t fully anonymous. Like it or not, anonymity is tough to maintain, especially when a project succeeds.

In addition, Chervinsky said that the developers of a successful project have a difficult time remaining anonymous and indicated that they may not be the only targets in a potential lawsuit based on U.S. law.

The Uniswap Labs team could go after a third party that violates the license by choosing to integrate the fork. This includes exchanges, decentralized exchange aggregators, investors, liquidity providers, market makers, among others. The possibilities for lawsuits are broad and “It just depends how aggressive they want to be,” the lawyer said.

Adding that the “threat” of a lawsuit could be enough to enforce the license and prevent a fork of the code, the lawyer believes that litigation could be just part of Uniswap Labs’ defense arsenal without ever having to pursue it. Chervinsky cited the opinion of his colleague Collins Belton:

Ultimately, suing someone isn’t only way for legal remedies to have force. It’s also why I have to unfortunately highlight to some people that just because you *can* sue someone and win doesn’t mean it’s smart to do so (e.g. getting buried in costs and bankrupt before winning).

In conclusion, the value of the license could go beyond suing everyone who attempts to fork the decentralized exchange. Chervinsky predicts a future in which other protocols adopt a similar strategy.

The trade-off for this action could be increased centralization and reputational damage to the DEX. However, The lawyer believes that a “well-calibrated” legal strategy could be beneficial. He also highlighted that one of the license best aspects is the ability for UNI token holders to revoke it. Chervinsky added:

Given all this, I think it’s premature to say BSL 1.1 should be the new standard for every DeFi project in every circumstance. “Uniswap did it, so we should too” may seem tempting, but the reality is every project is different & very few are positioned as well as Uniswap.

UNI follows a bearish trend

UNI trades at $26.91 with a 12.2% correction on the 24-hour chart. In the last weeks, UNI’s losses stand at $14.8%.

Uniswap UNI
UNI with negative performance in the 24-hour chart. Source: UNIUSD Tradingview
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Uniswap v3 announced for May 5, best DEX design on the planet?

The third iteration of the decentralized exchange Uniswap (v3) has a mainnet deployment date of May 5. The official announcement confirmed a highly anticipated feature, support for the second layer solution Optimism Rollups.

This feature will be enabled at a later date. The official announcement focuses on another “groundbreaking new feature” that the Uniswap Labs team has dubbed Concentrated Liquidity Positions. This will allow users to:

Rather than being required to allocate capital across the entire price spectrum from 0 to infinity, each LP is given full control over what price ranges they wish to provide liquidity to.

Another new feature is multiple fee tiers that will allow liquidity providers (LPs) to receive rewards relative to the amount of risk they take. The third iteration of the decentralized exchange will allow LPs to take advantage of “greater flexibility”.

This will have multiple direct implications for liquidity providers: they will be able to participate with up to 4,000 times more capital efficiency than in Uniswap v2 and earn fees by limit order, according to the official announcement. Therefore, they will receive higher returns, Uniswap Labs’ team said:

Capital efficiency paves the way for low-slippage trade execution that can surpass both centralized exchanges and stablecoin-focused AMMs.

Uniswap v3 introduces license to prevent forks

Researcher for cryptocurrency investment firm Paradigm, Dan Robinson, claimed that Uniswap v3 has the “best DEX (decentralized exchange) design on the planet”. Robinson believes the newly announced features put Uniswap above the competition.

He added that in the future other automated market makers could be built on top of Uniswap v3:

By combining multiple positions, LPs can approximate arbitrary curves. Any static curve can be implemented on Uniswap v3 and efficiently aggregated with the rest of its liquidity.

This includes custom formulas like the ones used by Balancer and Curve, as well as ones that don’t have elegant formulas. This means that most existing DEXes could be built on top of Uniswap, but it also vastly expands the design space to previously unimaginable AMMs.

The first iteration of Uniswap was launched in 2018, the second in May 2020. Since then, trading volume on the automated market maker has surpassed that of large crypto exchanges. As somehow of a trade-off, other projects have forked the DEX.

To prevent similar actions, the new iteration will be released with a Business Source License 1.1. In theory, this should prevent other projects from forking Uniswap’s v3 codebase. The license will last for 2 years, then a GPL 2.0 license will be adopted permanently.

However, the community can vote to speed up this process or give “exceptions”, Uniswap Labs stated:

We strongly believe decentralized financial infrastructure should ultimately be free, open-source software. At the same time, we think the Uniswap community should be the first to build an ecosystem around the Uniswap v3 Core codebase.

Governance token UNI is trading at $33.62 with losses of 2.7% on the 24-hour chart. On the one-week chart, UNI has posted gains of 12.6%.

Uniswap UNI
UNI’s performance still not reacting to Uniswap v3. Source: UNIUSD Tradingview
Posted on

Charted: Why Uniswap’s UNI Could Surge Above $35 and $40

Uniswap’s UNI is showing positive signs above $32.00 against the US Dollar. The price is likely to clear the $35.00 resistance and it could even rally towards the $40.00 level.

  • UNI is very stable above the $27.50 and $30.00 support levels against the US dollar.
  • The price is trading nicely above $32.00 and the 100 simple moving average (4-hours).
  • There is a key bullish trend line forming with support near $32.50 on the 4-hours chart of the UNI/USD pair (data source from Kraken).
  • The pair is likely to continue higher if it clears the $35.00 and $35.50 resistance levels in the near term.

Uniswap’s UNI Approaching Key Breakout

After a sharp downside correction towards the $27.50 support, UNI started a fresh increase. The last swing low was near $29.44 before the bulls pushed the price above the $30.00 resistance.

It broke the $31.00 and $32.00 resistance levels. There was a fresh test of the main $35.00 resistance. A high was formed near $35.13 before there was a minor decline. UNI dipped below the $33.50 level. There was a break below the 50% Fib retracement level of the upward move from the $29.44 low to $35.13 high.

Uniswap’s UNI

Source: UNIUSD on TradingView.com

It is now trading nicely above $32.00 and the 100 simple moving average (4-hours). The price is also stable above the 61.8% Fib retracement level of the upward move from the $29.44 low to $35.13 high.

Moreover, there is a key bullish trend line forming with support near $32.50 on the 4-hours chart of the UNI/USD pair. On the upside, the price is facing hurdles near $34.00. The main resistance is still near $35.00. A close above the $35.00 level could open the doors for a strong increase towards the $40.00 resistance zone.

Dips Supported?

If UNI price fails to climb above $34.00 or $35.00, it could correct lower. The first major support is near the $32.80 and $32.50 levels.

The main support is now forming near the $32.00 zone and the trend line. A downside break below the $32.00 support might open the doors for a push towards the $27.50 support. Any more losses may possibly lead the price towards the $27.50 zone.

Technical Indicators

4-Hours MACD – The MACD for UNI/USD is gaining momentum in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for UNI/USD is well above the 50 level.

Major Support Levels – $32.50, $32.00 and $30.00.

Major Resistance Levels – $34.00, $35.00 and $40.00.

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This FATF guidance could “wreak havoc” on Uniswap operators

International body Financial Action Task Fork (FATF) has issued new guidance for decentralized applications (DApps). Its implications could directly affect the DeFi sector and could have consequences for DApp “operators” such as Uniswap, Sushiswap, and others.

According to the agency’s definition and its standards, a DApp is software. However, the “entities involved” with the DApp can be Virtual Asset Service Providers (VASP). The guidance claims:

(…) a person that conducts business development for a DApp may be a VASP when they engage as a business in facilitating or conducting the activities previously described on behalf of another natural or legal person. The decentralization of any individual element of operations does not eliminate VASP coverage if the elements of any part of the VASP definition remain.

Attorney Gabriel Shapiro addressed potential consequences for the blockchain industry if the recommendations are implemented. Shapiro said:

Writing & deploying a smart contract (=free speech) is different from running a business with that smart contract (regulated).

Claiming that FATF recommendations could “wreak havoc” in venture finance and the blockchain industry if adopted, Shapiro added:

“a one-time sale of a VA makes you a money services business” thing has never made a lick of sense and seems inconsistent with FinCEN’s 2019 guidance.

Although FATF can only make recommendations or suggestions, these are internationally adopted by many regulators. Therefore, Shapiro believes they can have a real effect on the blockchain industry if u operators, i.e. Uniswap, are blacklisted by the body. Shapiro added:

I love DeFi and I’m very anti-KYC etc. But “repeal these laws just for DeFi because it makes people more free by providing plausible deniability” is not going to be persuasive to a person who believes the laws in question are good ones.

Member countries can apply sanctions, prohibitions and take other measures if the FATF suggests that any entity has “lost control” over compliance and money laundering prevention. Legal expert Stephen Palley said:

as some of us have been saying since the dawn of time, muh decentralization is apparently not yet a persuasive strategy to avoid AML/KYC obligations.

UNI on a 30-day rally

Data from Tradingview indicates that UNI has made significant gains (51.6%) over the last month. Currently, UNI is trading at $32.71. Although its performance in the last 24 hours is negative with losses of 1.3%.

Uniswap UNI
UNI with significant gains in the past month. Source: UNIUSD Tradingview

The good performance can be attributed to the release of Uniswap’s third iteration. Without a fixed deployment date, Uniswap v3 has caused great hype among its users. Uniswap inventor Hayden Adams is expected to provide details on the upgrade soon.