Why Curve Finance’s loss is Uniswap’s gain


Curve's TVL tanked after the latest exploits. And now, its stay as a top DEX or token could be jeopardized. 


  • Curve’s position among DEXes could be threatened, and Uniswap may take advantage.
  • CRV shorts dominated the derivatives market while traders longed UNI.

With Curve Finance’s [CRV] recent setbacks, Uniswap [UNI] could extend its market share since both protocols operated in the same realm. On 30 July, Curve was subject to a number of exploits, which drove the market to question the security of the automated market-making on the protocol. 

Realistic or not, here’s CRV’s market cap in UNI terms

Uniswap: Ahead of the Curve 

Uniswap has been ahead of Curve for a long time, while dominating the Decentralized Exchange (DEX) space. According to Token Terminal, Curve was way below Uniswap in terms of DEX volume dominance.

Uniswap, on the other hand, could boast of a186.5% hike in total trading volume in the last 24 hours. Also, net deposits on the protocol exceedingly overrode every other DEX project.


Net deposits on Uniswap and Curve Finance

Source: Token Terminal

This hike in net deposits showed that the rate of re-invested deposits on Uniswap outpaced other protocols. As a result, total fees generated by Uniswap reached $1.3 million — an 82.1% increase in the last 24 hours.

On looking at the tokens associated with both projects, there was a glaring disparity in sentiment. Here, the funding rate comes into play. Funding rates are periodic amounts of assets paid between long-positioned and short-position traders.

When the funding rate is positive, it means that long-position traders are dominant. Hence, there is widespread bullish sentiment leading longs to pay shorts a funding fee. Conversely, when the funding rate is negative, it implies that shorts are paying longs a funding fee to keep their positions open.

Bears on CRV, Bulls on UNI

At press time, CRV’s funding rate and UNI’s were at opposite ends. And according to Santiment, UNI’s funding rate on the DyDx was 0.003% while CRV’s funding rate was -0.007%. This data implies that Curve’s challenges have led traders to be bearish on the token.

CRV funding rate and UNI funding rate

Source: Santiment

Well, UNI’s rise to $6.52 within the last 24 hours could have also contributed to the reason traders are bullish on it. As per the Total Value Locked (TVL), both Uniswap and Curve registered a notable decline in the past 30 days.

The TVL measures the total value of digital assets locked or staked in a distributed application. When the TVL increases, it means that a protocol’s health is intact.

Is your portfolio green? Check the Uniswap Profit Calculator

But when it decreases, it means that unique deposits into the protocol have fallen. At the time of writing, Curve’s TVL has lost 48.51% of its TVL, and fallen out of the top 10. This decrease indicates how participants have lost trust in the Curve ecosystem.

Curve Finance and Uniswap TVL

Source: DefiLlama

Interestingly Uniswap was far ahead with a TVL of $ 3.78 billion. In conclusion, if Curve fails to find a lasting solution to its trouble, then it leaves open a chance for Uniswap to extend its market share.



Source : [Why Curve Finance’s loss is Uniswap’s gain](ambcrypto.com/why-curve-finances-loss-is-uniswaps-gain/) by Victor Olanrewaju - Crypto UNI Curve•AMBCrypto by Victor Olanrewaju / July 31, 2023


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