I think April will be a memorable month. Uniswap UNI
-6.60%
.
First of all, the decentralized exchange powerhouse surpassed $2 trillion in total trading volume on April 5, solidifying its status as a major DEX player as competition increases across the network, especially on Solana, where Uniswap does not exist.
What’s a little more unfortunate is that the platform received a Wells notice from the Securities and Exchange Commission on April 10th. Many thought this signaled the beginning of the war on DeFi.
The SEC’s pursuit of cryptocurrencies is nothing new, but in the past we’ve mainly seen high-profile cases brought by the SEC against centralized players.
Uniswap is a somewhat unique case. Many cryptocurrency platforms have withdrawn from US customers due to fears of strict regulatory action. As a result, some DeFi platform frontends block users with US IP addresses (although some people bypass this with VPNs), but Uniswap does not participate in this practice. Frontends are generally one of the most user-friendly ways to interact with DeFi protocols, but they are not the only way.
Uniswap Labs simply operates a website that provides people with access to the Uniswap protocol, a set of smart contracts. This makes Uniswap a suitable target for the SEC, especially given its market power.
There was an outcry of support from the cryptocurrency community online, with many pointing out the importance of the fight. Uniswap founder Hayden Adams posted to X that he wasn’t surprised and was “just annoyed, disappointed and ready to fight.”
There is still a long way to go in this battle. Coinbase received the Wells notice in March 2023, but a year later, not much has come of it.
UNI price action
The price of UNI, the Uniswap governance token, fell slightly on the news, falling from $11 just before the announcement to less than $9. However, UNI received a boost from its offer to reward token holders in late February, and the token was still up 23% on Friday. However, the market crash over the weekend pushed UNI further down.
And interest in Uniswap itself doesn’t seem to be waning. Daily trading volume increased over the weekend and continued to surpass the $3 billion threshold.
Fees collected on the exchange front-end also spiked late last week, but not due to increased usage. Uniswap Labs has increased the six-month old 0.15% fee added to certain swaps on its web interface to 0.25%.
The change appears to have been made just hours after Uniswap confirmed the Wells announcement without any announcement. The increased fees will likely help strengthen Uniswap Labs’ coffers ahead of the legal battle. On Ethereum alone, the interface generated over $500,000 in revenue just one day after conversion.
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