Uniswap is a groundbreaking decentralized cryptocurrency exchange and automated liquidity protocol built on the Ethereum blockchain. It was created to provide a seamless and permissionless way for users to swap various cryptocurrencies, commonly referred to as tokens, without the need for traditional intermediaries like centralized exchanges or market makers. Unlike traditional exchanges that rely on order books, Uniswap uses liquidity pools to facilitate trading. These pools are comprised of user-contributed funds and serve as automated market makers, allowing traders to exchange tokens at any time without relying on counterparty orders.
The key features and principles of Uniswap include:
Decentralization: Uniswap operates on the Ethereum blockchain and is entirely decentralized. This means that users retain control of their assets and can participate without the need for a central authority.
Liquidity Pools: Users can provide liquidity to various token pairs by depositing equal amounts of two different tokens into Uniswap's liquidity pools. In return, they earn fees from traders who use these pools for swaps.
Token Swaps: Uniswap facilitates token swaps through a simple and user-friendly interface. It uses a mathematical algorithm to calculate exchange rates based on the ratio of tokens in the liquidity pool, ensuring continuous liquidity.
No Order Books: Unlike traditional exchanges, Uniswap does not rely on order books or matching buyers with sellers. Anyone can trade directly with the liquidity pools.
Permissionless: Uniswap is open to anyone who wants to participate. Users can create new liquidity pools for any token pair, and there are no restrictions on listing tokens.
Immutable: Once deployed on the Ethereum blockchain, Uniswap's smart contracts are immutable, meaning they cannot be altered or controlled by any single entity.
Governance: Uniswap has introduced a governance token called UNI, which allows holders to propose and vote on changes to the protocol, including updates to fees and other parameters.
This analysis provides an overview of the origins of Uniswap traders on Avalanche and compares them to those on the Polygon blockchain. Firstly, we will analyze user origination across Uniswap in terms of user count, transaction count, and the average number of transactions per user, which means understanding which platform(s) users use for trading. The user groups will be categorized as Uniswap Frontend and Non-Frontend users. Additionally, we will cover and compare the distribution of Frontend users between Avalanche and Polygon. Finally, we will consider the breakdown of pools per user origination.
The difference between Frontend Users and Users using Aggregators:
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Uniswap Frontend on Polygon has a much larger number of transactions compared to Uniswap Frontend on Avalanche. This suggests that Uniswap is more actively used on the Polygon network.
1inch network, while having fewer transactions on both networks compared to Uniswap Frontend, still has a significant presence on both Avalanche and Polygon. However, it has more transactions on Polygon, indicating that it might be more popular or actively used in the Polygon ecosystem.
Uniswap Frontend on Polygon has a much higher average number of transactions per user compared to Uniswap Frontend on Avalanche. This suggests that users on Polygon are engaging more actively with Uniswap, potentially trading more frequently.
1inch network also has a higher average number of transactions per user on Polygon compared to Avalanche, though the difference is not as pronounced as with Uniswap Frontend.
It's important to note that some origins on Polygon have extremely high average transaction numbers per user (e.g., "contract" with 1582.222222). This could be due to specific use cases or automated activity, and it's essential to consider the context of these transactions.
Polygon has a significantly larger number of users compared to Avalanche across all transaction categories, which suggests a larger number of Frontend users that actively participate in transactions In each category, the user count is notably higher on Polygon. Avalanche has a limited number of users who are more active, as indicated by the "From 100 transactions and above" category.
Polygon has significantly higher user participation in Uniswap Frontend pools compared to Avalanche. The top pools on Polygon have millions of users, while Avalanche's top pools have thousands of users.
The top pools on Polygon are dominated by pairs involving WMATIC (Matic) and stablecoins like USDC and USDT. These pools have a massive number of users, indicating high liquidity and trading activity.
On the other hand, Avalanche's top pools have a smaller user base, and they include various pairs involving WAVAX, stablecoins, and other assets.
The top Uniswap Frontend pools on both Avalanche and Polygon have a significant number of transactions, but there are notable differences:
On Polygon, the top pool, WMATIC-USDC 500 10 UNI-V3 LP, stands out with a staggering 4,826,873 transactions, and most of the top pools have millions of transactions each. The overall transaction volume on Polygon's top pools is much higher compared to Avalanche. This indicates a higher level of trading activity and liquidity in the Uniswap Frontend pools on Polygon.
There is no big different pattern in top pools used by Frontend users and non-Frontend users. On Polygon, WMATIC-USDC 500 10 UNI-V3 LP stands out with an exceptionally high user count and transactions. Avalanche's top pools are more specialized, such as WAVAX-USDC 500 10 UNI-V3 LP and USDt-WAVAX 500 10 UNI-V3 LP. Similarly, the number of non-frontend users on Polygon's top pools is significantly higher than on Avalanche, which means that Polygon's top pools attract a much larger user base. In the case of Polygon, MATIC (Matic) pairs like WMATIC-USDC and WMATIC-WETH are dominant, likely due to the network's native token being widely used in DeFi projects and transactions. On both networks, stablecoin pairs such as USDC-WETH and USDC-USDT are still popular and have a significant number of transactions.
User Origination Across Uniswap: Polygon has significantly more users on Uniswap Frontend compared to Avalanche. 1inch network also has more users on Polygon than on Avalanche. Uniswap activity peaked on both chains in July 2023. Polygon users engage more actively with Uniswap, as indicated by higher transaction numbers
Pool Breakdown: Polygon has more users in Uniswap Frontend pools compared to Avalanche. Top Polygon pools involve WMATIC and stablecoins, while Avalanche pools are more varied. Non-Frontend users are more significant on Polygon, particularly in MATIC pairs and stablecoin pairs on both networks. Overall, Polygon dominates in terms of users and activity in Uniswap pools, while Avalanche's user base is more limited but shows specialization in certain pool types.