Uniswap Launches on Polygon, Driving MATIC to All-Time Highs

The popular decentralized exchange has deployed on Polygon in a bid to attract more retail traders.

Dec 22, 2021 at 7:01 p.m. UTC
Updated Dec 22, 2021 at 9:55 p.m. UTC

Popular decentralized exchange Uniswap and Ethereum scaling system Polygon said Wednesday that all Uniswap version 3 contracts are now deployed to the Polygon mainnet.

The deployment comes a few days after UNI holders voted to pass a governance proposal approving the deployment. The price of MATIC and Uniswap’s UNI token were higher on the news, with MATIC, the native asset of the Polygon network, hitting a fresh all-time high of $2.66 earlier today.

“Ethereum introduced a noble vision of an open, borderless economic system accessible to everyone,” Mihailo Bjelic, co-founder of Polygon, told CoinDesk in a Telegram chat. “With the increased usage, fees on Ethereum layer 1 have effectively ‘priced out’ most of the users.”

The Polygon version of Uniswap aims to change that, he added.

“With this deployment, Uniswap as the flagship Ethereum application returns back to the original vision and again offers low fees and open access to everyone,” Bjelic said.

As the largest DEX by trading volume, Uniswap is already deployed on two companion, or layer 2, systems, Arbitrum and Optimism. According to data from Defi Llama, about $62.19 million in value is locked on Uniswap on Arbitrum, while roughly $36.94 million worth of tokens are locked on the Optimism version.

Both numbers are much smaller than the total value locked (TVL) on the Ethereum mainnet version of Uniswap, a staggering $8.75 billion.

That said, Uniswap’s TVL lags behind Curve’s $22.23 billion, the biggest decentralized finance (DeFi) protocol by that metric. Curve currently supports several blockchains and layer 2 systems including Avalanche, Harmony and Polygon.

Bjelic, the Polygon co-founder, told CoinDesk Uniswap will be hugely successful on Polygon, citing the network’s already successful DeFi ecosystem. Polygon is currently the No. 7 chain by TVL, per Defi Llama data.

A report by blockchain data firm Chainalysis earlier this year said DeFi is still dominated by experienced crypto traders and investors, partly due to the costly transaction fees on the Ethereum blockchain. Scaling projects like Polygon have benefited from Ethereum’s congestion problem.

UPDATE (Dec. 22, 19:23 UTC): Changes headline to indicate fluid timing of tech launch.

UPDATE (Dec. 22, 20:38 UTC): Changes headline to reflect that the deployment is now live.

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Muyao is a reporter on the markets team. She is based in Brooklyn, New York. She owns a marginal amount of bitcoin.