Uniswap has generated $3 billion in trading fees, but holders of the governance-token DEX do not expect their price to rise to fair value. K33 Research analyst Anders Helset concluded as such.
The specialist valued the project’s Fully Diluted Valuation at $6.4 billion.
Uniswap charges 0.3% on each transaction on the DEX, with the fees going to liquidity providers.
The core value proposition of UNI is to receive a share of these fees in the future. The expert doubted that holders would be able to count on that going forward.
The balance can be shifted in favor of UNI holders through voting. A large share of assets is in the hands of major investors who are not interested in changing tokenomics. The supply is fixed, and issuing more UNI would require a majority of votes.
Helseth noted that:
- Users always choose the protocol with the highest liquidity at the best prices;
- Copies of the protocol can be created easily at low cost.
In his view, these two theses imply liquidity providers are prevailing in the race for trading fees. They hold the assets, while the protocol can be freely copied via forks.
Shifting users to an alternative is not without costs, but its relatively low cost preserves the edge for liquidity providers.
“In other words, the potential for UNI to earn significant trading fees is virtually non-existent,” Helseth concluded.
Back in July 2023, Uniswap Labs introduced UniswapX — an open-source liquidity-aggregation protocol for decentralized exchanges.
Earlier, Glassnode analysts observed growing user interest in Uniswap on the Arbitrum network. A comparable platform in the L2 solution captured 16.2% of weekly total turnover. In March the figure was twice as high (32.8%).