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Uniswap Trading Volume Explodes to Billions!

A latest DeFi project named Delta has been launched on Uniswap.

Its rebasing system had made trading volume on the decentralized exchange seem higher than normal.

The trading volume on Uniswap has jumped to 450% in the last 24 hours. Total volume, per statistics on Uniswap.info, is $7.17 billion, compared to $1.6 billion from yesterday. The previous daily record was $2.19 billion last October 26, 2020.

The token that was responsible for today’s volume is DELTA. In the past 24 hours, it has done $6.13 billion in trading, or 85% of the total volume, despite only $16.4 million in liquidity.

The new record won’t stand. Uniswap creator Hayden Adams wrote on Twitter that the statistics DELTA had accumulated won’t count toward the DEX’s global volume because of a quirk of Delta’s protocol. Following that change, the real trading volume is around $1.05 billion, a normal day for Uniswap.

Delta is not yet familiar to anyone for it is still new. Its token, which stays on the Ethereum blockchain, just launched yesterday. To acquire it without staking, Uniswap must be used.

Delta names itself “an on-chain options layer which utilizes a combination of liquidity standards to reduce premiums and offer competitive options prices.” Even more simply, options trading becomes even more expensive and volatile when there is a lack of liquidity; Delta says that it wants to fix this.

The methods for doing it are far from intuitive for new initiatives to DeFi, the catch-all phrase for decentralized finance systems that allow the people to trade, earn interest, borrow, and lend cryptocurrencies without the use of banks or brokers.

Basically, Delta introduces a schedule for liquidity: “When Delta is transferred, a token vesting schedule is activated,” the Delta Financial team wrote in an explanation on February 9. “10% of the total token balance is sent to the user while 90% is initially locked and released linearly, over a 2 week period.”

However, the large volumes that Uniswap is seeing are the result of Delta’s liquidity rebasing system, an algorithmic way of raising the price to mine tokens in time. The way that the system is designed makes it look like wash trading, although it is not because the trading is not resulting in the transactions cancelling each other out. Rather, Delta is toying with Uniswap’s liquidity pools to basically keep liquidity solid and make the price less volatile.

Decentralized exchanges like Uniswap comprise a corner of the DeFi space. DEXs differ from centralized exchanges by eliminating the need for users to give up custody of their tokens. Whereas centralized exchanges have stored tokens to help facilitate exchanges, decentralized exchanges allow the people to trade directly with one another.

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