Trading volume on Uniswap, a decentralized exchange protocol, has soared to new heights. According to data from Dune Analytics, monthly volumes for Uniswap versions on layer-2 (L2) chains have reached an all-time high, led by activity on the Arbitrum and Base chains.
The increase in Uniswap activity appears to have been spurred by expectations of a softer regulatory stance from the Securities and Exchange Commission (SEC) under former President Trump’s administration.
Notably, Uniswap volumes on Arbitrum increased from $8.1 billion in September to $19.28 billion by the end of October. Although Uniswap V3 on Arbitrum trails Aave and GMX, two decentralized finance (DeFi) protocols with larger value locked in lending vaults, Arbitrum is rapidly emerging as a crucial platform for scalable, cost-effective decentralized exchange (DEX) trading.
Simultaneously, on the Base chain, trading volumes jumped from $9.91 billion to $12.97 billion. Throughout this period, Uniswap remained the second most active DEX on Base. The surge in Uniswap’s activity coincided with a broader recovery in L2 projects in terms of token market price and transaction activity.
Uniswap V3 is the dominant DEX, present on a total of 23 layer-1 (L1) and L2 chains. However, most activity is concentrated on a few top chains, due to the fragmented liquidity that resides in specified liquidity pairs. While there is little overlap between different Uniswap V3 versions, significant liquidity inflows and outflows occur between top L2 chains and Ethereum.
The increase in Uniswap activity has also manifested in higher monthly and short-term fees. As of November 27, Uniswap surpassed Ethereum to rank among the top five fee producers across chains and apps. The Uniswap Universal Router consumes over 10% of total gas on Ethereum, exceeding even the Tether (USDT) smart contract.
Despite generating $5.44 million in fees across all chains, Uniswap still reports $7.86 million in monthly losses, mainly due to incentive payouts. Nevertheless, Uniswap continues to provide a net benefit to its ecosystem participants and liquidity providers.
Uniswap’s heightened activity is not driven by meme tokens, as swaps remain relatively expensive on Ethereum. Instead, the most active asset is Wrapped ETH (WETH), commonly traded as a means of bridging liquidity to other assets. Uniswap also relies heavily on USDT stablecoins for cashing out of WETH.
In the last month, the total value locked in Uniswap has increased by 30%, reaching $6.19 billion. This surge is attributed to the appreciation of ETH and other assets. Meanwhile, the UNI token broke above $13.20, marking a one-month peak. With a 65% dominance of long positions, UNI is considered a bullish token for long-term growth, reflecting the crucial role of DEX activity in crypto adoption.
As a whole, DEX tokens have become more active, surpassing $38 billion in valuation. UNI was among the biggest gainers, adding 53% in a week and outpacing the growth of Raydium (RAY). The demand for DEX tokens also buoyed other assets like JUP and CAKE, indicating a surge in decentralized trading.
