Uniswap’s governance token, UNI, which was launched Wednesday night, has been on a roller-coaster ride in the past 24 hours, but despite the price volatility the total market cap of UNI could make the automated market maker (AMM) one of the most valuable decentralized finance (DeFi) projects in the coming years.
Based on 1 billion tokens outstanding and a current market price of $3.50, the project has an implied market value of $3.7 billion on a fully diluted basis, according to data compiled by CoinGecko. There is currently $829.7 million worth of crypto assets committed to Uniswap, according to DeFi Pulse.
Since its launch, UNI’s prices reached a high of $4.08 before going back down to around $3 as past users of Uniswap claimed their airdropped UNI tokens.
As a venture capital-backed project, Uniswap raised $11 million in a Series A funding led by Andreessen Horowitz, along with Union Square Ventures, Paradigm and a few other prominent funds in early August, and sold shares of Universal Navigation Inc., the company behind the protocol, to its investors.
Some 178 million UNI (about 17.8% of the total supply) will be allocated to investors with a four-year vesting cycle which, at the current price, is worth approximately $600 million.
When the exchange did its Series A round, there was speculation investors could potentially receive returns through a protocol fee of 0.05%, which was introduced to the second version of Uniswap. However, the fee function is currently turned off.
More than 50,000 addresses were holding UNI at press time, including the creator of its competitor SushiSwap, Chef Nomi. Uniswap’s token came just a week after SushiSwap migrated over $800 million in crypto assets from the former to jump-start its competing AMM.
Andre Cronje, the developer of DeFi protocol Yearn.Finance, said he was “meh” at the surprising launch of UNI token. According to Cronje, it looked more like Uniswap was defensively responding to SushiSwap’s threat. Cronje’s project’s governance token, YFI, was traded at $32,038 at the press time, up a staggering amount from its initial trading price at around $32, giving his project a valuation of estimated $961.7 million.
Unlike UNI, there were no allocations of YFI to the project’s team members or investors, meaning it is governed completely by the users.
The total value locked in Uniswap went up 7.22% over the past 24 hours, while the figures for SushiSwap and Yearn.Finance were both down 14.28% and 14.48% to $631.9 million and $661.7 million, respectively, according to DeFi Pulse.
Major centralized exchanges, including Binance and Coinbase Pro, listed UNI within just a few hours since its launch. OKEx even went as far as offering a full set of trading tools for hedging UNI including spot trading, margin, swap trading and coin-marginated perpetual swap. Coinbase is among the project’s investors.