September 29, 2020 · 2 min read
The biggest crypto craze of the moment is decentralised finance, and the most popular decentralised exchange is Uniswap. The Novum Insights analyst team has pulled together data on the most active of the 3000 trading pairs on Uniswap and it has been a rollercoaster ride as to where volume is. The sector has lured in much of the crypto world with prospects of huge returns, driven by individuals providing liquidity to the good, the bad and the ugly of the defi world.
We thought it wise to consider who is providing ‘regular’ sufficient liquidity so that you will have ‘herd’ protection.
In the month of September, there has been an average daily liquidity of over $1BN on Uniswap and as expected, the ‘Core’ tokens (large, well established tokens like USDT, USDC, DAI, WBTC) make up the bulk of the liquidity.
Chart here - https://docs.google.com/spreadsheets/d/e/2PACX-1vRpjPIrrKrzkVRUSfjD5-m1frzIo8w9JJqRBKUmIS-oEZ3Zx36XMWeNvNLHs4Jkp24p9Ck-cg_ednJW/pubchart?oid=1602614211&format=interactive
After the ‘core’ tokens where is the rest of the liquidity going? Here is the same chart with the Core token pairs taken out;
And the underlying chart here - https://docs.google.com/spreadsheets/d/e/2PACX-1vRpjPIrrKrzkVRUSfjD5-m1frzIo8w9JJqRBKUmIS-oEZ3Zx36XMWeNvNLHs4Jkp24p9Ck-cg_ednJW/pubchart?oid=915237286&format=interactive
The biggest ‘splash’ in the DEFI world was (so far) ‘SUSHISWAP’ a clone of UNISWAP protocol with added token (and menu?) masterminded by the anonymous ‘ChefNomi’ - https://twitter.com/NomiChef . This project delivered a super-trendy website and exciting ‘tasty’ yields on the provision of liquidity - like these incredible interest rates (what could go wrong right?).
So when SUSHI did ‘pop’ and the master Chef withdrew $14m in one go, the price of the SUSHI token plummeted and everyone rushed for the exit on UNISWAP to stop providing liquidity for $SUSHI. However, the frenzy succeeded in creating general interest and ‘contagion’ to other projects who saw huge peaks in their liquidity around the SUSHI craze - as per this graph from UNISWAP data - “Peak Sushi”Underlying data is here.
Underlying data is here - https://docs.google.com/spreadsheets/d/e/2PACX-1vTu0IpcrR-emD4JIhBGYluc0zlL2iH7sOstSc4D_Yjvzssc1Ew3jYez3uHmYyGMhFXnHXN7CFs3ee53/pubchart?oid=398390480&format=interactive