Uniswap, a popular decentralized cryptocurrency exchange, has reported record-breaking monthly trading volumes of $38 billion across Ethereum Layer 2 networks in November, a $4 billion increase from its previous record in March. The surge in trading activity was led by Arbitrum, which had $19.5 billion in monthly volume, followed by Base at $13 billion.
These high trading volumes have directly impacted Uniswap’s revenue, with the protocol collecting over $90 million in fees during November, making it the sixth-highest blockchain protocol in fee generation. This performance has led to a 42% increase in the price of UNI, Uniswap’s native token, which reached $12.58.
Henrik Andersson, the chief investment officer at Apollo Crypto, attributes the volume increase to rising demand for assets and stablecoins within the DeFi ecosystem, along with on-chain yields trending upward. Uniswap’s performance has significantly outpaced other decentralized exchanges, such as Solana-based Raydium (which saw a 2.2% decline) and Jupiter (which saw a 7.7% increase).
The growing adoption of Layer 2 scaling solutions, designed to handle transactions more efficiently and at lower costs than the main Ethereum network, has contributed to the surge in trading volume across multiple Layer 2 networks. Base’s strong performance, with $13 billion in monthly volume, indicates rapid user adoption and growing trust in the relatively new network.
The distribution of trading volume across multiple Layer 2 networks suggests a healthy diversification of the DeFi ecosystem, as traders utilize various Layer 2 solutions for their transactions. The cost efficiency of Layer 2 networks, which offer lower transaction fees compared to the main Ethereum network, has attracted traders and contributed to the high trading volumes across decentralized exchanges.
The data from Dune Analytics, which tracks these metrics, shows consistent growth throughout November rather than isolated spikes, indicating sustained trading interest rather than short-term speculation. The current trading volumes coincide with increased activity in the broader cryptocurrency market, as favorable market conditions have led to higher trading volumes across decentralized exchanges.
Uniswap’s $90 million in fee generation highlights the protocol’s ability to monetize its services effectively, with fees generated from the small percentage charged on each trade. Uniswap’s record-breaking performance in November surpasses several competitors in the decentralized exchange space, with the protocol’s ability to handle high volumes while maintaining stability supporting its position as a leading platform in the cryptocurrency ecosystem.
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