Uniswap: all time high for transactions, but not for volumes

The year 2024 becomes the best year ever for the DEX in terms of the number of transactions: during 2024, the DEX Uniswap has already surpassed the overall transaction record, setting a new all-time high.

In fact, taking into consideration the number of swaps carried out during the course of the year, in 2024 more than 300 million transactions have already been surpassed, while for example in 2023 they stopped at less than 180. 

During the last major bullrun, in 2021, there were just over 50 million, and since the growth continued even in the middle of the bear-market, in 2022, in fact, until now every year Uniswap has broken the record of the previous year. 

It is worth noting, however, that in the course of 2024, it took only a few months to break the 2023 record, and since there are still more than four months left until the end of the year, 2024 could end with a real boom. 

The boom of DEX

Taking as a reference not the number of transactions, but the volumes traded (converted into dollars), the all-time monthly record of all DEX remains that of November 2021. 

However, at that time the prices of many crypto were at their highest, so with the same trades and tokens exchanged, the volumes were higher. 

At this moment Bitcoin is not far from the highs, but on DEX the exchanges in Bitcoin are not primary. Many altcoins traded on DEX, on the other hand, are very far from the highs, and this explains why the current volumes are not at the highs despite the boom in transactions. 

Furthermore, thanks to chains with very low fees, such as Solana, and especially to Ethereum’s layer-2, which with the Dencun update at the beginning of the year significantly reduced transaction costs, it has now become more convenient not only in general to use DEX, but also to make transactions of small amounts on these decentralized exchanges. 

Perhaps therefore to analyze the historical growth process of DEX it is more convenient to analyze the trend of the trading volume rather than the number of transactions, at this moment. 

The trend of volumes

Among the DEX, Uniswap has returned to dominate unchallenged, as far as volumes are concerned. 

For example, in the last seven days it has exceeded 9.7 billion dollars, while the second, PancakeSwap, stopped below 4.9. 

Among other things, while Uniswap was born in the Ethereum environment, and recently suffered a lot from the competition of DEXs on Solana, PancakeSwap was born on BSC (Binance Smart Chain). So the great wave that had brought the DEXs on Solana to surpass those on Ethereum has somewhat faded, so much so that BSC has reappeared in the highest positions of the ranking by volumes. 

The first major monthly peak of the total volumes traded on DEX was in May 2021, during the full bull run, when over 280 billion dollars were traded in a month. 

Instead, the absolute monthly record is in November, above 290 billion.

In December 2022, they had plummeted below 45 billion, due to the bear-market that had caused the price of many cryptos to collapse.

After a brief but fleeting rise during the first half of 2023, still in September of last year they turned out to be less than 45 billion. 

Given that from December 2022 to September 2023 the price of Bitcoin has risen significantly, the fact that the trading volumes on DEX have not increased as much suggests quite clearly that BTC does not have a primary role on decentralized exchanges. 

In fact, from September to December 2023, the volume more than tripled, probably thanks, for example, to the strong appreciation of SOL (Solana). 

The monthly peak of 2024 occurred in May, with almost 270 billion dollars, while August for now stops at 170. 

Uniswap

Uniswap was born in 2019 on Ethereum, but already the following year it began to land on other chains.

Initially, the other chains were layer-2 of Ethereum, but last year it also landed on BSC. 

Until the end of 2022, trading volumes on other chains were absolutely marginal, but starting from March 2023, Arbitrum emerged forcefully as the main chain challenging Ethereum regarding trading volumes on Uniswap. 

On the other hand, Arbitrum is a layer-2 of Ethereum, but with the advantage of having much lower fees. 

After the Dencun update in March, Coinbase’s Base has emerged strongly as another chain on which many swaps are performed on Uniswap, precisely because it guarantees very low fees. 

Optimism and Polygon, on the other hand, always remain a little bit behind. 

BSC for now appears to be at the levels of these last two.