Uniswap, the considerably popular decentralized exchange platform, added a whopping 1,000 new token pairs in the past week – several of them of questionable quality – as the decentralized finance hype train continues its run. A recent CoinDesk report has taken a closer look at the increased activity on the platform.
Since early September, Uniswap users, on average, have added about 150 pairs every single day. The staggering numbers highlight the increasing traction of permissionless token creation now feasible through the Uniswap’s unique token factory feature.
On Sunday, a record high of 221 pairs was created according to Dune Analytics.
An Exponential Rise in Uniswap Listings
Jack Purdy, a decentralized finance analyst at Messaru quoted in the CoinDesk report, called the exponential growth in the number of tokens and pairs on Uniswap is a good thing. He said it this growth showed the power of a completely open, permissionless financial primitives.
As of writing, Uniswap supports 8,278 trading pairs. This is a whopping 90% increase month-on-month. It’s also nearly 10 times the pairs supported by Binance – the largest traditional cryptocurrency exchange. And Binance is no slouch – it already supports 838 markets according to Cryptowatch.
Meanwhile, in August 2020, Binance added new listings for only 15 tokens. This was still a 4x increase from four listings in 2019.
Uniswap seems to be setting record high trading volumes. In Q2 2020, just four tokens – SushiToken, USDC, tether, and wrapped ether – witnessed over $50 million in their 24-hour trading volumes.
User Caution Advised
On Wednesday afternoon, one user listed the “Uniswap Exchange Token”. The token is believed to be fake and not created by the Uniswap team. Which demonstrates the complete lack of permissions concerning token listings on the platform.
There has been no clarification from Uniswap on the listing of this token, or on the abundance of token pairs the platform is seeing.
However, the Uniswap team has acknowledged the problem in a blog post. According to the Uniswap team, as the rate of token issuance accelerates, it has become increasingly difficult for users to filter out high quality, legitimate tokens from scams, fakes, and duplicates. They also added that the trend is something they expect will only accelerate in the future.
For those active on Uniswap, exercise extreme caution amidst the sea of trading pairs and tokens. Check out this list of common mistakes to avoid while investing in DeFi tokens.
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