Uniswap’s UNI token has been in a downfall ever since its launch. The token which created tremendous hype in the space still faces a number of hindrances to make new all-time highs.
- About Uniswap
- Uniswap’s UNI Token Launch
- UNI Price Comparison with other Governance Tokens
- UNI Price History
- UNI Price Prediction for 2020
- UNI Price Prediction for 2021
- UNI Price Prediction for 2022
- Is UNI Token a Good Buy?
- Frequently asked questions
Uniswap is a decentralized P2P exchange automated market maker (AMM). It is built as two smart contracts on Ethereum.
Unlike centralized exchanges which require a buyer and seller order to create a viable market, Uniswap’s liquidity comes directly from liquidity providers (LPs). The separation of the traders and liquidity providers eliminates the roadblock to pumping a token. Anyone or any project can list a token on Uniswap for trading in a permissionless.
Cryptocurrency pairs on Uniswap are denominated in ETH; for instance, YFI-ETH, DAI-ETH. The liquidity pools for these pairs are built using similar pairs.
Uniswap’s UNI Token Launch
UNI token launch on Sept. 17 took not only the DeFi ecosystem but also the entire cryptocurrency space by a storm. Past users and liquidity providers on Uniswap woke up on Sept. 17 at least $1000 richer.
The surprise launch of UNI for past users caused a lot of volatility in the price of the Uniswap’s governance token.
Utility and incentive to hold governance tokens are what separates a good project from a bad one. Recently, numerous DeFi projects are popping up just like the ICO mania. These projects witness tremendous inflow of volume during the early promotional phases for liquidity mining. However, soon the farmers dump their tokens on the market because there is practically no incentive to hold these tokens.
Governance tokens provide voting rights over the updates on the project. A successful project will attract more people trying to benefit from its governance than a project designed only for yield farming.
UNI Price Comparison with other Governance Tokens
A comparative study with other governance tokens is also not reliable because of the newly found yield farming craze which might grow or subside in the future. Moreover, while the general concept of yield farming requires staking of tokens or using a platform, their value is backed differently across each platform.
Note that the decentralized applications (DApps) like MakerDAO, Compound or Aave aren’t new, but the boom in the governance tokens are.
Let’s take the example of COMP tokens, these are governance tokens which are distributed to the lenders and borrowers on the platforms. The distribution rewards both lenders and borrowers divided 50-50 among them.
ownership > governance
— Kyle Davies (@kyled116) September 24, 2020
Essentially, the governance tokens play no role in the functioning on the platform. The direct earnings from the platform are passed on to the liquidity providers and other participants on the network. The governance token rewards are additional rewards that sometimes come by burning a part of those earnings or could be completely separate from it.
Lastly, the governance tokens themselves have grown astronomically in the last couple of months. The support and resistances are not established on long-term charts (weekly and monthly).
YFI, the governance token for yEarn Finance peaked with a 5500% rise since August. Others like Aave (LEND), SNX, MKR also rose ecstatically over the last few months. Hence, defining the DeFi boom.
During such a bull market or price discovery phase, anything is possible because there is a high risk: reward ratio.
UNI Price History
The all-time high price of UNI token on Binance is $8.62 on Sept. 18. At launch, there was considerable volatility in the price of the token between $2.4-$3.6. On the 17th itself, the token jumped to a high of $5.93.
In the first 20 days of launch, the token has been in the red of 13 of them. The support and resistance level of $3.63 has been critical for UNI.
UNI Price Prediction for 2020
The short price history of UNI token and massive volatility in price makes it difficult to analyse the price trends. Moreover, the surprise launch of these tokens has taken cryptocurrency users by surprise. Hence, there is a lot of FOMO and FUD around the token currently.
For anyone who has been long enough in crypto, the launch of a token usually leads to a downtrend as stakeholders and early investors find a way to exit their positions.
UNI has been in a downtrend ever since launch. Uniswap’s UNI made a listing on top exchanges like Coinbase, Binance, and FTX within the first day of its launch.
The 21-Day simple moving average is reliable support for the bulls. UNI token broke below this level after a fake breakout of October 1. The resistance to the price at $3.89 is paramount for the bear’s move to hold short positions at the time.
Moreover, closing above the 50 SMA is particularly vital to the bullish case because it will add credence to the breakout. Traders must keep in mind potential resistance zones around $5.
On the four-hour chart, the price is reaching the end of the descending triangle platter, which is further bearish. A descending triangle pattern is recognized through lower highs and horizontal support, forming a right-angled triangle.
The support of the pattern is at $3.65 if the price confirms below this level, the target of a descending triangle points at $0.13.
The general idea being that UNI token must define its support and resistances more clearly with time because currently there is a lot of uncertainty about it with extreme possibilities attainable.
If the price breaks above the resistance from the descending, it could reach any targets up the current all-time high (ATH) at $8.65.
UNI Price Prediction for 2021
It’s been only three weeks since the UNI token launch. Hence, estimating the price of the token one year in the future relies completely on fundamental value with certain probabilities.
The possible scenarios in the future for Uniswap are:
- Uniswap continues to keep up with the volume on centralized exchange and stands to as much as $500 million in a year. These earnings from fees will be earned by the liquidity providers and then governance of the exchange will be more valuable.
- Expansion of DeFi space outside of Ethereum or general fading out of the exchange leads to loss of liquidity, and the governance token holds very little value in the future.
- UNI token and the platform evolves over time into serving the market in a different way. Currently, the team is focused on building the Uniswap platforms and is doing it via grants and public goods.
Moreover, Uniswap also bears the technical risk that comes with any smart contract-based project, i.e. contracts can be exploited.
Currently, the incentive for mining UNI tokens is acting in favour of increasing the liquidity. However, due to the high fees for Ethereum GAS, the cost of a swapping transaction is more than $3. This repels the low volume retail traders on the platform; hence, reducing the volume of transactions which is the medium for earning.
UNI Price Prediction for 2022
The future of decentralized finance lies not only in the hands of developers and users but also regulators. The debate on the application of securities law has taken a new turn with DeFi governance tokens.
Ethereum, the platform on which it is designed also plays a critical role in the future of the project.
Ethereum gas prices fluctuate daily in line with demand. If many folks are trying to use Ethereum all at once, then gas prices will be higher. If activity is low, then gas prices will be lower. The implementation of layer-2 and ETH 2.0 is still away in the future, hence, until then, the hindrance to retail adoption is still there. UNI token could attract the users to the platform, but their success is intertwined which is causing confusion among traders.
While the gains have been bountiful for some, there have been numerous instances of rug pulling an early sell-off as well. Hence, regulation might be necessary for the organic growth of the space as well.
Is UNI Token a Good Buy?
Investing in UNI tokens currently is equivalent to investing in a start-up or a venture fund. While the prospects look bright, the probability of future success lies in the dark. To hedge risks from extreme price movements, diversification of the portfolio helps in increasing the probability of gains. Users must look to invest just not in one crypto; moreover, not just one DeFi project as well. The attention to space is merely 6 months old, there are a number of ways in which the ecosystem can evolve.
Being the leading DEX in the space, the governance tokens for the platform are bound to hold recognition and value in the market. However, the UNI token liquidity mining incentives will end on Nov. 17 where we can witness a halt in the sell-off. Until the supply seems to be outpacing demand.
Moreover, the high inflation in the first four years along with limited use of governance token reduces its marketability in the initial period. Investors must perform due diligence of the regulatory outlook for the tokens as well.
Can't comment much on near-term price… ????
…but I guess I'm just surprised that people are surprised by $UNI raging. ????
Most used app, fees greater than Bitcion, does volume bigger than many CEXes, and one of the best demos of Ethereum.
Learn to see & buy the real ones. ????
— DCinvestor.eth ⟠ aftab.eth (@iamDCinvestor) September 18, 2020
Q1. What is the current price of Uniswap (UNI)?
XRP is currently trading at $3.20 on Binance.
Q2. Will UNI hit $10?
According to the above predictions with organic growth of Uniswap platform, UNI can hit $10 into the future.
Q3. Where can I buy UNI Tokens?
You can purchase Ripple [XRP] on top cryptocurrency exchanges including Binance, Bitstamp, Okex, Poloniex and FTX.
Q4. What is going to be Uniswaps’ UNI price tomorrow?
As far as technical levels concerned, UNI will trade between $3.4000 and $3.000.
Q5. Is UNI Token a great asset for investment?
The DeFi space along with its governance token is comparatively new to accurately make that kind of judgement. Nevertheless, according to current stats, if one wants to invest in DeFi tokens – UNI stands out as a viable option.
Q6. Will Uniswap survive?
Uniswap is a decentralized platform for trading ERC-20 tokens. The survival of the platform faces no threat, nonetheless, it comes with technical and regulatory risks.
A fault in the design of smart contracts can cause loss of funds on the platform. Moreover, regulators may announce restrictions for use in their country which will reduce its marketability.
Q7. Will UNI reach $10?
At $10, the total market cap of UNI will be $10 billion dollars. While not impossible, the chances of it reaching $10 in the near future are bleak as even the top centralized exchange Binance BNB coin currently has a mcap of $4.2 billion.
Q8. What will be the value of Uniswap (UNI) in the next five years?
Uniswap is predicted to trade at $8.00 in the next five years.
Q9. Is UNI Token inclined to fall or rise in the next five years?
Uniswap is an innovative platform which could replace centralized trading platforms, including the launch of traditional securities on Ethereum. Hence, there is a good chance of its growth. However, the token distribution process might cause hindrance to the rise of the price.