Uniswap is an automated market-making (AMM) decentralized finance (DeFi) protocol that facilitates the exchange of ERC-20 tokens through the use of liquidity pools. Although the decentralized exchange (DEX) was launched in November 2018, the UNI token wouldn’t exist for another couple of years. Then, at the end of August 2020, rival DEX SushiSwap forked Uniswap’s code and introduced the SUSHI governance token in a practice known as “vampire mining”, which saw the total value locked (TVL) in Uniswap drop by over 75% around the start of September as many Uniswap liquidity providers migrated to SushiSwap to earn SUSHI.

On 16 September 2020, Uniswap announced they would be introducing their own liquidity incentives with the launch of the UNI governance token. Despite not having been on the market for as long as many other cryptocurrencies, UNI has already made some exciting price movements, and if you want to know why then you’re in the right place. We’ve compiled everything you need in order to get a better understanding of the intricacies of UNI price, as well as the factors which influence it.

Uniswap Price History

UNI had the rare honour of receiving both a Coinbase listing and a Coinbase Pro listing just a few short hours after its launch. On 17 September 2020, UNI hit the Coinbase market trading at $3.86, but by the next day, its price had shot up 125 % to $8.67.

This didn’t last long though, and a few days later, UNI price had dipped below $4. Despite briefly surpassing $5.50 a couple of days after that, UNI spent most of the next month in steady decline before bottoming out at $1.76 around the start of November.

This marked the start of a period of growth and over the next couple of weeks, UNI made gains of more than 150% to almost reach $4.50. After that followed a month of consolidation during which UNI was mostly range-bound between $3 and $4.

On 19 December, UNI’s market cap surpassed $1 billion for the first time. The price gains only resumed right at the end of December and UNI ended 2020 trading at $5.16, which represented an increase of a third from its starting value in September.

The rally continued into 2021 and became much more pronounced, including a surge of 43% in a single day in February. After three months of setting higher highs and higher lows, UNI reached its all-time high of $36.83 on 23 March 2021, at which point it had a market cap of over $17.6 billion.

The price of UNI crashed 30% over the next couple of days to around $25.60, but some more steady gains followed, taking UNI back over $30 at the start of April. This represents an increase of around 480% since the start of the year.

Analyzing Uniswap’s Price History

UNI, like many other cryptocurrencies, tends to follow what’s known as a boom-and-bust cycle. This is a pattern in which growing excitement leads to a sudden surge in price before doubt and disillusionment set in – causing an equally sudden crash.

UNI made impressive gains in the first couple of days of its existence. This was likely helped by the fact that it was immediately listed in Binance, Coinbase, and Coinbase Pro. Listings on major exchanges like these tend to pump the price of a token as they introduce it to new investors.

15% of the total supply of UNI had already been airdropped to past Uniswap users and liquidity providers, so the crash that occurred a couple of days after UNI’s launch may have been a result of airdrop recipients deciding to sell their UNI and make a quick profit.

The rally at the end of 2020 that continued into 2021 wasn’t unique to UNI – the entire cryptocurrency market pumped around this time on the heels of Bitcoin’s latest bull run, as frequent crypto milestones, news stories, and institutional involvement has led to an influx of new crypto market investors.

The increase in UNI price since December has broadly corresponded with the growth of TVL in Uniswap. The liquidity of assets on Uniswap has also followed a similar pattern, suggesting demand for UNI is correlated with activity on the Uniswap protocol. The large single-day surge in February came with a huge spike in the volume traded on Uniswap, which was over $166 million that day, up more than 435% from the previous day.

Factors Influencing The Price of Uniswap (UNI)

1 billion UNI were minted at genesis, and apart from the 150 million UNI airdropped to past Uniswap users, the rest is being released to the team, advisors, investors and community through a four-year vesting schedule.

After this period, there will be a perpetual 2% annual inflation rate. This means that UNI isn’t a scarce asset like Bitcoin and its price could depreciate if demand for UNI doesn’t scale to meet its growing supply.

A possible driver of UNI demand is its function as a governance token. UNI holders can vote on a range of Uniswap features including how the treasury funds are spent and what fees should go to liquidity providers. UNI token holders could choose to vote through a proposal that gives them a cut of the trading fees generated on Uniswap. This would make UNI more beneficial to hold and therefore put upward pressure on its price.

Uniswap’s market cap has made impressive gains since December 2020. In general, the larger a cryptocurrency’s market cap is, the harder it is for it to go higher. As of April 2021, the ratio of UNI’s market cap to TVL in Uniswap is more than 3.5:1, which suggests that UNI could be overvalued. However, the market may already be pricing in the fact that UNI holders have the potential to earn passive income from trading fees in the future.

The launch of Uniswap V3 is due in May 2021 and will be rolled out on Ethereum’s short-term scaling solution Optimism. This should reduce the fees on the exchange and so could encourage more participation. V3 will also increase the percentage of fees that UNI holders could vote to award themselves, which could drive up UNI demand.

Live Uniswap Value and Market Cap

The live price of UNI varies from moment to moment as it’s dictated by the balance of buyers and sellers on exchanges, which is in constant flux.

Given Uniswap’s volatility, its live price can change by a large amount in a very short space of time. The market cap of Uniswap is equal to the price of UNI multiplied by the number of UNI in circulation.

Max supply is [live-max-supply] [coin-short-pp]  which will be reached in 2024, after which a 2% annual inflation rate will take effect.

Uniswap Price FAQ

How is the price of Uniswap calculated?

UNI’s price at any given time is decided by the balance of supply and demand on exchanges. When more people are buying UNI than selling it, the price goes up, and when more are selling than buying, the price goes down.

Why is the price of Uniswap different on different cryptocurrency exchanges?

UNI’s price is based purely on trading as there is no standard global UNI price, so no one knows what it is “supposed” to cost. The trading volume and liquidity are different for each exchange and those differences are what affect the price.

What will UNI be worth in the future?

It’s impossible to make price predictions with any kind of certainty as a whole host of different factors could impact the future value of UNI. However, if UNI holders vote to award themselves a share of the trading fees generated on Uniswap, this would drive demand for UNI and likely increase its price in the future.

Conclusion

UNI is a relatively new token, having only been created in September 2020. However, it has made some pretty impressive gains in that short time, going from being worth less than $4 to reach over $36. The journey wasn’t smooth, though, as UNI’s volatility led to some surges and crashes along the way.

Various different factors have played a role in determining UNI’s price, including the growth of the Uniswap protocol, demand for UNI’s governance rights, and trends in the wider crypto markets. Its current valuation is derived from the balance of supply and demand in the markets and constantly changes.

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