The landscape of decentralized exchanges (DEX) is gradually diversifying. The market share of the former leader Uniswap is constantly being eroded, which marks the intensification of competition among DEXs. However, it also provides a good environment for innovation and allows for future decentralization. The trading experience is worth looking forward to.
Uniswap’s market share dropped from more than half to 30%
According to DeFiLlama data , Uniswap's market share has dropped from more than 50% in October 2023 to 30% today.
Winners whose market share of Uniswap continues to shrink include Aerodrome, which was launched only in August last year. Riding on the amazing growth wave of Ethereum Layer 2 Base, it has become the largest DEX on the Base chain and occupies 5.27% of the market share; In addition, there is Orca on the Solana chain. Its market share increased from 9% at the beginning of the year to 12% last month. The data in the past 24 hours was 7.31%, occupying the third largest DEX throne.
DEX trading volume reached $174.964 billion last month, which is equivalent to the level at the beginning of 2022, and reached $260.373 billion in March this year, the highest level since November 2021. The total trading volume in the past 24 hours reached US$4.473 billion. Although it only accounts for 5% of the overall trading volume (including CEX), it still highlights the market demand for decentralized trading solutions.
The meaning of diversified DEX landscape
In this regard, researchers Brandon Kae and Ivan Wu wrote an analysis that the diversification of the DEX landscape may lead to more innovation and user empowerment:
- Competitive Innovation : The rise of challenger protocols has forced established players such as Uniswap to remain vigilant. Although Uniswap recently proposed a fee-sharing model with token holders, regulatory concerns quickly put a damper on these plans, highlighting the complex environment that DEXs must navigate.
- User benefits : More competition means better features, improved tools, and potentially lower costs for end users. This race to the top is ultimately a victory for the cryptocurrency community.
- Ecosystem resilience : A more diverse DEX ecosystem reduces the risk of single points of failure and fosters a stronger and more anti-fragile DeFi landscape.
- Customized solutions : Different DEXs can cater to niche markets or specific user needs, resulting in a more detailed and user-friendly DeFi experience.
Brandon Kae and Ivan Wu added that building a successful DEX requires more than just fancy algorithms, but also a good user experience, ensuring deep enough liquidity, and navigating regulatory minefields. Successful strategies include:
- Reward program to attract liquidity providers
- User-friendly interface (helps simplify complex DeFi concepts)
- Novel features such as limit orders or cross-chain swaps
- Strategic partnerships with DeFi protocols
Brandon Kae and Ivan Wu are optimistic about the intensifying competition among DEXs and believe that market leaders will continue to innovate and provide better user experiences because of the challenges they face.
“EtherVista” claims to defeat Uniswap
Last week, a new DEX "EtherVista" appeared on Ethereum, claiming to defeat Uniswap and claiming to be the new standard for DEX.
As soon as it was launched, Ethereum Gas soared from less than 1 Gwei to over 25 Gwei, and its native token $VISTA also achieved a thousand-fold increase, hitting a high of $39.43 on September 4, which shows that it is a protocol worthy of attention.
The innovation points of EtherVista mainly include two points:
- The initial liquidity of tokens issued on its platform will be locked for 5 days to prevent token issuers from running away (rug pull).
- Unlike Uniswap, which uses pool tokens as transaction fees, its transaction fees are denominated in ETH and allocated to liquidity providers and currency issuers.
In this way, the project income will be proportional to the number of transactions, thereby providing a mechanism for currency issuers and liquidity providers to have consistent interests and be willing to maintain and optimize the project in the long term.
According to the latest official post, on the 12th day after its launch, the platform has achieved a number of achievements, including: a net inflow of 597 ETH, 885 tokens created, a total transaction volume of US$425 million, and a total transaction count of 180,000 Second-rate.
In the future, in addition to providing currency issuance and DEX services, EtherVista will also launch functions such as lending, futures, and free flash loan. Therefore, it is worth continuing to pay attention to whether the protocol can really defeat Uniswap, or whether Uniswap will fight back.
