Arbitrum [ARB] AirDrop has benefited the protocol and its users, but it has also benefited other protocols such as Uniswap [UNI]. According to Uniswap’s 28 March tweet, 92% of all ARB holders used Uniswap to swap their received token rather than other DEXs. This revealed that the Uniswap protocol was preferred by the majority of crypto community members.

UNI experienced a similar rise of activity. According to Santiment data, the number of active addresses using UNI has increased in recent days, while its price has continued to fall. Santiment indicated that this was a bullish divergence and that the token’s price may grow.

However, traders expecting the UNI price to rise should be wary of the dropping long/short ratio, which indicates a decrease in the number of long-term holders. Short-term token holders are more inclined to sell their stakes when prices rise, which can drive the token’s price down in the short run.

Also, the MVRV ratio of UNI has risen in recent days, implying that many investors may soon turn profitable and that selling pressure on the coin may intensify. Even if UNI may have a bright future, the Uniswap protocol should be improved. According to Token Terminal data, Uniswap fees have dropped by 29% in the previous few months, despite an increase in active users on the protocol.

The large quantity of bot activity on the Uniswap protocol could explain the drop in fees collected. According to Dune Analytics, MEV bots accounted for 41.1% of total volume on the DEX. MEV bots can have a negative impact on the DEX by front-running transactions, which implies inserting their own transaction before another’s in order to profit from the price shift. This can result in the initial transaction failing or the trader receiving a lower-than-expected price, which can discourage trading on the DEX and undermine Uniswap’s image.

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