The memecoin craze is driving record numbers of people to trade on decentralized exchanges (DEXs). Last month, for example, more than half a million users transacted on Uniswap.
According to data from Dune Analytics, 523,606 unique wallets traded on Uniswap in May. This number beats the previous record from January 2022 by almost 50%.
Uniswap is the top DEX by 24-hour volume at $1.15 billion, outperforming its closest rival, PancakeSwap, by 4.5 times. Despite the recent spike in activity, the protocol’s UNI token has greatly underperformed ETH since March.
The speculative fervor fueled by memecoins is generating small fortunes for some and resulting in disastrous losses for others. This comes as traders driven by “FOMO” (fear of missing something) rush to grab the next small market cap token to explode.
Furthermore, the high levels of activity that memecoin trading generated also resulted in a record burn rate for Ethereum in May. Approximately 139,300 ETH worth $259 million was burned last month. That represents 51% of all Ether destroyed since the blockchain transitioned to consensus proof-of-stake eight and a half months ago, according to Ultra Sound Money.
Volume increase at Uniswap
While about 88% of Uniswap’s total locked value is concentrated in Ethereum, its Arbitrum-based v3 deployment now accounts for 19% of daily trade.
Uniswap has embarked on a tight multi-network expansion over the past few years, predominantly deploying on major Layer 2 networks. The protocol is active on Arbitrum, Optimism, Polygon and Zksync Era, as well as alternate L1s BNB Chain and Celo.
On Wednesday, a governance proposal advocating the launch of Uniswap v3 on Base, Coinbase’s upcoming Layer 2 network, gained unanimous approval.
Coinbase is waiting until Optimism completes its Bedrock update on June 6th to launch Base. This is because the network will use Optimism’s OP Stack. The codebase allows Layer 2 to adopt a modular design that allows OP Stack-based L2s to easily switch between different execution engines and fraud proofing.
Networks based on OP Stack can later join Optimism “Superchain” – a Layer 2 pseudo-sharded network.
Warning: The text presented in this column does not necessarily reflect the opinion of CriptoFácil.