Uniswap V2 surpasses Uniswap V1 on liquidity
Uniswap V2, the second version of the popular decentralized exchange, recently surpassed the original version (Uniswap V1) in terms of liquidity. The recent issuance of Compound’s new Comp token resulted in a subsequent pairing (COMP/ETH) on UniswapV2 that enabled Uniswap V2 to obtain more liquidity.
Why it matters:
- With the release of Uniswap V2, the Uniswap team decided to let users choose which protocol (V1 or V2) that they wished to exchange with. Liquidity has the ability to entrench users which consequently had the potential to slow Uniswap V2’s adoption. While Uniswap V2 provides more features, Uniswap V1 has maintained better liquidity up until today. Now that Uniswap V2 has more liquidity, there’s a clear incentive to use the new and improved version.
- Uniswap proved they could effectively migrate liquidity form the old version to the updated platform. Importantly, Uniswap V2 comes with a built-in fee mechanism that if enabled will allow the venture-backed team to collect revenues from the decentralized exchange.
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