Analyst Note: Uniswap x Genie

What is a decentralized exchange doing acquiring an NFT exchange aggregator? Many people have wrestled with this question since Uniswap Labs made the Genie acquisition announcement. But breakdown the question: A protocol that exchanges digital tokens is acquiring another protocol that exchanges digital tokens?

Well, that just sounds routine.

Since the rise of NFTs, we have categorized the world of JPEGs outside that of DeFi. Related, but in separate circles. However, we forgot that ERC-20s and NFTs are both tokens. Each represents the same thing: digital ownership. ERC-20s are typically organizational ownership or claim, while NFTs are typically ownership of digital media or an item.

So why shouldn’t a protocol unify the exchange of value tokens (ERC-20s) with cultural tokens (NFTs)? Crypto as an industry has already begun blending the previously disparate worlds of finance and culture so combining these worlds at the product level is only fitting.

With this in mind, the strategic rationale behind Uniswap’s acquisition of Genie is best understood through three key areas:

1. User Acquisition
2. User Experience and Approachability