- On-chain activity on the Uniswap network increased despite the latest fallout.
- Some unrealized profits plunged into losses.
In the last seven days, the price of Uniswap [UNI] has reduced by 5.13%— a notable contrast to what happened with several altcoins within the same period. However, there were grounds for the decrease, which saw a number of UNI holders sell off the tokens previously held.
Read Uniswap’s [UNI] Price Prediction 2023-2024
The community is not satisfied with the clarification
According to on-chain analytic platform Santiment, Uniswap’s decision to change its swap fees was highly responsible for the dump. On October 17, the decentralized exchange announced that the new swap fees for traders would now be 0.15%, but the structure would only affect specific tokens.
Some tokens impacted include Ethereum [ETH], Circle [USDC], DAI, Wrapped Bitcoin [WBTC]. The introduction of this fee structure means that Uniswap’s most active traders would need to deal with additional costs when making transactions on the protocol.
However, the decision did not seem to sit well with Uniswap users and some UNI holders. Although Uniswap founder Hayden Adams tried to explain the importance of the resolution, comments under his post did not find his statement detailed enough.
I work in crypto because of the immense positive impact I believe it can have on the world, removing gatekeepers and increasing access to value and ownership.
I’m proud of the ways @Uniswap Labs has contributed to that effort and want to make sure we’re creating sustainable…
— hayden.eth 🦄 (@haydenzadams) October 16, 2023
Before the latest controversy, users of the protocol cast doubts over the project’s commitment to Decentralized Finance (DeFi). This was because Uniswap was planning on introducing KYC requirements on the latest version of its wallet.
According to the critics, such a feature contradicts the fundamentals of the sector in which the project is built.
Activity rises and provides an opportunity
Despite the fall in price, there has been an increase in on-chain activity on the Uniswap network. According to Santiment, UNI active addresses jumped from 4656 on 12 October to 5805 at the time of writing.
Daily active addresses show the number of distinct addresses involved in transactions. This metric indicates the daily level of crowd interaction with a token. So, the increase in UNI’s Active Addresses means there has been more speculation around the token than a few days back.
Source: Santiment
While the jump in active addresses indicates rising interest in the token, the Network Growth showed otherwise. Network Growth shows the number of new addresses interacting with a network.
At press time, Uniswap’s Network Growth was down to 208. This decrease means that there has been less adoption of the UNI token and a fall in traction on the network. Another metric that felt the impact of the fallout was the Market Value to Realized Value (MVRV) ratio.
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As a measure of the market cap to realized cap numbers, the MVRV ratio shows how much of a fair value a token is. As of this writing, the MVRV Ration (7d) was down to -4.595%. This simply means that the number of UNI holders in unrealized profit had fallen.
At the same time, the fall offered market players an opportunity to buy the token at a discount.
Source: Santiment