Uniswap’s liquidity plunges 40% in a day as incentives dry up

CRYPTONAIRE LYWEEK CRYPTO investment journal

Almost 40% of liquidity on leading DEX Uniswap has left the platform with the end of UNI rewards for liquidity providers.

The total value of assets locked in leading decentralized exchange Uniswap has plummeted by 38% in 24 hours amid the conclusion of its UNI liquidity rewards program on Nov. 17.

Meanwhile, “vampire” clone SushiSwap has doubled its TVL and is aggressively pursuing additional liquidity.

As of this writing, Uniswap’s TVL is down a total of 43% since posting an all-time high of $3.07 billion just three days ago. It now sits at $1.75 billion and is still falling.

Following the sharp decline in Uniswap’s liquidity, token holders have embarked on the process of voting for a new governance proposal that seeks to reinstate rewards in the form of UNI tokens for liquidity providers.

The new proposal, put forward by Cooper Turley of crypto-powered music streaming platform Audius, cuts the amount of UNI rewards in half compared to the former program. While 2.5 million UNI tokens were previously distributed to the liquidity providers of Uniswap’s WTBC/ETH, USDC/ ETH, USDT/ETH and DAI/ETH pools each month, the new proposal would see 1.25 million UNI designated to each pool monthly for two months — equating to 10 million tokens total, or roughly 4.6% of UNI’s current circulating supply. Read more...