Data interpretation of Uniswap V3 status

After Uniswap V3 was launched, the first thing that attracted attention was to improve the capital efficiency of liquidity providers through liquidity aggregation. After more than half a year of development, PANews found a feature that might have been overlooked - customizable transaction fees, making Uniswap a near-monopoly in DEX's trading volume. By analyzing the transaction data of Uniswap and other DEXs, we found that the current advantages of Uniswap V3 include:

• Provide lower transaction fees, 72.31% of the transactions occur in trading pairs with a 0.05% first-level transaction fee.

• Due to the increase in trading volume, liquidity providers of 0.05% fee trading pairs have higher returns than 0.3% trading pairs.

• The share of Uniswap's trading volume on Ethereum increased from 47.2% to 80.4%, while the total volume of other DEXs declined during the same period.

• In the USDC/USDT trading pair, Uniswap V3 has a better conversion ratio than Curve in the $100 billion level of transactions.

• The multi-chain deployment of Uniswap V3 has also begun to show its advantages, and the launch of Polygon will surpass QuickSwap.

Uniswap V3 transaction volume distribution: 72.31% of transactions with 0.05% fee
In common DEXs, the general transaction fee ratio is 0.3%. In addition to improving transaction liquidity and reducing slippage through liquidity aggregation, Uniswap V3 is now able to improve its own performance through lower transaction fees. Competitiveness in routine transactions.



Trading volume

According to Uniswap V3 data that occurred on February 23, 2022, there were 45 trading pairs with a trading volume of more than $10,000 in the past seven days. Among them, there are 15 trading pairs with a handling fee ratio of 0.05%, mainly trading pairs between ETH and stablecoins or stablecoins; 4 with a handling fee ratio of 0.01%, all of which are trading pairs between stablecoins; procedures There are 20 trading pairs with a fee ratio of 0.3%, including trading pairs composed of commonly used assets and ETH; there are 6 trading pairs with a fee ratio of 1%, and their TVL and other data are all low.



Trading volume

From a volume perspective, the combined volume of these 45 trading pairs over the past seven days is $10.4 billion. Among them, the transaction volume brought by the 0.05% fee has accounted for the vast majority. The transaction volume in the past 7 days was 7.54 billion US dollars, accounting for 72.31% of the total transaction volume. The second is the trading pair with a 0.3% fee, with a trading volume of $2.03 billion, accounting for 26.92%. The transaction volume corresponding to the 0.01% fee for stablecoin trading pairs only accounts for 7.73%, while the transaction volume for the 1% fee is only 0.5%.

In the absence of a liquidity incentive plan, the transaction volume in Uniswap V3 mainly comes from transactions with a fee ratio of 0.05%, which is difficult to achieve in other DEXs or even CEXs. Relying on this advantage, Uniswap may be hard to meet its opponents in DEX, and even attract a part of the trading volume of CEX.

Liquidity providers: The average APY of liquidity providers with a handling fee of 0.05% is higher than 0.3%
Under the 0.05% handling fee, there are two possibilities for the income of the liquidity provider. One is that the income is lower due to the smaller handling fee ratio, which leads to a decrease in the income from providing liquidity, and the other is that the low handling fee may cause More trading volume, resulting in increased earnings.

What is the actual situation?

PANews selects the USDC/ETH and ETH/USDT with the largest transaction volume for comparison under different transaction fee ratios. It was found that when the TVL of the USDC/ETH trading pair with 0.05% fee was lower than the 0.3% level, the 7-day trading volume was nearly ten times that of the 0.3% level. On the whole, without considering the distribution of liquidity, the average yield of liquidity providers with a 0.05% fee is higher than that of a 0.3% tier.