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Half of LPs on Uniswap v3 Are Losing Money

Almost half of liquidity providers on Uniswap v3 are losing money due to impermanent loss, a recent research found. A report provided by Topaz Blue and the Bancor Protocol shows that 49.5% of LPs receive negative returns on the platform, famous for highest fees reflected by high trading volume.

The authors studied 43% of all of Uniswap v3’s liquidity pools from May 5, to Sep. 20, 2021. For the given period, those pools have generated $199 million in fees from $108.5 billion in trading volume. And during that time frame, the pools in question suffered $260 million in impermanent losses, resulting in $60 million in net total losses.

From a total of 17 analyzed pools, only three received net positive gains – WBTC/USDC, AXS/WETH, and FTM/WETH. Impermanent loss outweighed the gains in 80% of checked pools, with MKR/ETH pool showing the worst results resulting in loss for 74% of LPs.

The report suggests average users might receive better gains from their portfolios while just holding the assets without providing liquidity.

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Number of DEX Increased by 100% in Two Years, Chainalysis Reported

Chainalysis published a report on the competitive landscape of cryptocurrency exchanges. According to the analytics firm, the researchers decided to look at the dynamics of this market when they noticed that for the first time in several years of consistent growth, the number of active crypto exchanges began to decline – in August 2021 there were almost 200 fewer exchanges registered than in the same month in 2020.

Source: Chainanalysis

However, the study showed that the overall growth trend still continued. About 205 DEXs were noted in Q3 this year, which is 100% more than in 2019. The number of OTC (over-the-counter) brokers has also increased by 50%, there are now about 150.

“Across all categories however, the number of small exchanges has dropped, suggesting the exchange market can no longer support niche players. The lesson? Exchanges need to reach a mass audience, or a small audience of large-scale traders, in order to stay in business.” – Chainalysis concluded.

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Neon Labs Has Built Ethereum Virtual Machine on Solana

Blockchain developer Neon Labs has created a compatibility bridge between Ethereum and Solana, Ethereum Virtual Machine (EVM) called Neon.

It allows to run Ethereum smart contracts directly on Solana blockchain. This opens a lot of opportunities for cross-chain development. Basically, Neon grants Ethereum’s native decentralized apps access to Solana’s speed and low fees.

For now, Neon has deployed on testnet, the launch on mainnet is expected later this quarter. During the testnet period EVM will support such popular dApps as Uniswap, SushiSwap, MakerDAO, and 0x.

As DeFiTeller reported, last month Solana raised $450 million to build up its ecosystem.

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Uniswap Paid Its LPs Over $920M in Revenues

Uniswap is doing well while on L2 alpha upgrade and is expected to become the first protocol to generate $1 billion in fees, analyst says.

A senior analyst at Intotheblock Lucas Outumuro pointed out on Twitter that liquidity providers received over $920 million in revenues since the launch of the platform.

Outumuro also marked out that high revenues are driven by Uniswap’s massive volumes. “Even after a 70% drop from its highs on the week of May 19, volumes have grown 40x year over year, and 920x in comparison to January 2020,” he wrote.

Source: Outumuro’s Twitter

Uniswap’s aggregate TVL across versions managed to reach $10 billion at its highest, which was especially impressive considering there were no liquidity mining incentives at the time.

Source: Outumuro’s Twitter

According to Outumuro, DEXs volume share vs CEXs on Uniswap has increased from 0.32% to 10% within two years, and now Uniswap makes approximately two-thirds out of the DEX volume.

Source: Outumuro’s Twitter

Analyst also noted Uniswap is efficient not only with its capital, but also with the amount of revenues it can generate per employee. It seems that each of 37 Uniswap’s employees is responsible for receiving $32 million of revenue.

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Coinbase Wallet Now Supports Ethereum Scaling on Polygon

Coinbase has announced its digital wallet now supports a variety of decentralized applications based on Polygon. The integration is implemented on both the mobile and browser extension versions of Coinbase Wallet.

Coinbase tweeted the news on July 13. The company also promised it’s going to integrate more Ethereum Layer 2 networks both on mobile and web in the coming months.

Polygon, previously known as Matic Network, is a layer 2 solution built to reduce transaction fees and confirmation times on the Ethereum network. Now Polygon is among other DeFi platforms such as Uniswap, Compound, and Aave, easily accessible via Coinbase Wallet.

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Harvard-Based DeFi Education Fund Dumps Half of Its Grant from Uniswap for $10M

DeFi Education Fund, a Harvard-based initiative claiming to advocate politicians and regulators about the Decentralized Finance sector, has just dumped 500,000 UNI tokens it received from Uniswap, the largest DEX on the crypto market.

The grant was given in June after a snapshot vote titled ‘Funding a Political Defense for DeFi’. DeFi Education Fund was launched by the student organization Harvard Law Blockchain and Fintech Initiative, aiming to lobby DeFi interests to preempt excessive regulation. 1 million UNI was supposed to be liquidated over four to five years.

But on July 12 the Fund abruptly announced that it had sold 500k UNI for around $10.2M USDC in an over-the-counter (OTC) trade with the help of GenesisTrading, “in order to fund its efforts”.

This event has fueled concerns in the community regarding the centralization of Uniswap’s governance process, with many users now questioning the transparency and motives of the fund.

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PancakeSwap Pulls Away From Competition

DappRadar has found that PancakeSwap surpassed its competitors and firmly settled in the first place of the blockchain application tracker rating. The DEX has acquired more than 2 million active wallets over the past 30 days and continues to grow. Also, now the exchange can boast that it has more than $6 billion locked in its smart contracts.

The success of PancakeSwap is even more spectacular against the background of the fact that it was conceived as a fork of the leading Ethereum DEX Uniswap.

PancakeSwap is far ahead of all competitors in terms of active wallets. The closest aApp Autofarm is gaining a quarter of its active users, and Uniswap has about 10% of its Binance Smart Chain powered ‘twin’. But this indicator has nothing to do with value, and more money still falls on the Ethereum DEX due to the fact that BSC users tend to invest smaller amounts.

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CoinMarketCap Launches Token Exchange

The price-tracking website for cryptoassets CoinMarketCap expands its functionality by giving its users a new possibility – the exchange of tokens. On any supported network and token, holders will be able to connect a supported crypto wallet and swap their tokens directly on CoinMarketCap.

At launch, Uniswap (V1 and V2) will be the first supported DEX for token swaps. Wallets supported by Uniswap will also be available for the CoinMarketCap token swap. This includes MetaMask, WalletConnect, Coinbase Wallet, Fortmatic and Portis. Ethereum is the only network supported at this time.

“First, navigate to the page of the coin that you wish to swap. You will see a converter between a selection of two coins on the right side of the page, and the option to “Swap on CoinMarketCap.” Once you click to swap, you will be able to select the cryptos that you wish to swap and the amount. At this point, you will need to connect a wallet and sign the blockchain transaction,” company wrote in its blog.

The service has also developed a special guide for exchanging tokens for beginners.

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Pangolin Transaction Volume Has Increased by 21% in the Last 30 Days

Pangolin, a community-driven decentralized exchange on Avalanche, has its transaction volume increased by 21% in the past 30 days, according to DappRadar. Coming from more than 14,8K user wallets, about $175M was processed by the platform.

With this activity, Pangolin becomes the most used dApp in the Avalanche ecosystem. In the ranking, it is followed by Lydia Finance, which has 2350 user wallets, and Gondola Finance with 2120 wallets in third place.

For Avalanche, which was launched only at the end of March, these results are not bad, and it is still too early to compare them with what PancakeSwap has, for example. The exchange on Binance Smart Chain attracts 3.2M wallets per month. On the Ethereum blockchain, Uniswap V2 and V3 together have more than 1M wallets in the last 30 days.

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Switching places: BSC Outperformed Uniswap V3 in Generating Fees

More recently Cryptofees.info showed a completely different picture: the leader in the volume of user-spent commissions was also Ethereum, but Uniswap and Bitcoin have been fighting for second and third place for the past few weeks. However, neither succeeded in that race yesterday, with Binance Smart Chain bursting into second place.

Source: CryptoFees.info

Having beaten both versions of Uniswap and Aave, Binance blockchain jumped from fifth to second place as of June 6, but later has briefly lost out again on the silver to the newest version of Uniswap. As of the time of writing, the largest DEX is generating $1.23M, while BSC is getting $1.48M in commissions. Both are behind Ethereum with its $4.22M.

An interesting picture also emerged on June 5, when SushiSwap briefly broke into the top five projects, in terms of commissions, with $2.17M behind only both versions of Uniswap and Ethereum.

Source: Cryptofees.info