Why This DeFi Exchange is a One Way Ticket for Ethereum’s ERC-20 Tokens?


uniswap pump dfi

Why This DeFi Exchange is a One Way Ticket for Ethereum’s ERC-20 Tokens?

Uniswap is a decentralized exchange with a unique mechanism for trading ERC-20 tokens on its platform. Apparently, its the perfect platform for pumping tokens. CryptoGainz, prominent crypto trader tweeted,

there’s no orderbook to scare buyers or induce selling, only a bullish narrative and sell side liquidity crisis

Uniswap evaluates the price of a token based on the balance of Ethereum and of the token. On a successful trade or exchange, the value is added in accordance with the Ethereum swapped for the token. Hence, there are no order books or even real sell-side.

this is better than a traditional cex because the fomo is unbridled there’s no orderbook to scare buyers or induce selling, only a bullish narrative and sell side liquidity crisis

CryptoGainz, a prominent crypto trader notes.

The Ampleforth Instance

In the last few days, the volume at Uniswap was comparable to Coinbase and Binance. Qiao Wang, a crypto and financial analyst tweeted,

Uniswap did $126M volume last 24 hours. This is 1/3 of Coinbase. 1/2 of Kraken. More than Gemini, Polo, and Binance US combined.

Moreover, more than half the volume at Uniswap was dealing in $AMPL.

AMPLEFORTH/USD Chart on Coingecko (Source)

On 23rd June last month, Ampleforth was listed on Uniswap. One week following the listing, the price jumped new highs. However, after a massive surge, the price of the token has now fallen below consolidation levels before the rise at $0.6.

It is backed by prominent investors like Pantera Capital, Arrington XRP Capital, Coinbase CEO Brian Armstrong and so on. Nevertheless, the abnormal surge with the subsequent downfall seems highly suspicious at the moment.

Ampleforth, a legit ponzi, has a $1.3bn fully diluted cap. I don’t know what glue you all are huffing to be in this thing but it’s clearly the next absolute wreckage story waiting to happen.

Eric.eth, an Ethereum developer and podcast host, tweeted,

Hence, eventually, the tokens pumped by targeted liquidity with a lack of actual usage, the dump is even faster. Listing on derivatives exchanges and other mainstream CEX also raises the probability of dumps.

As for Uniswap, the idea was to create a simplistic DEX platform. However, it has a lot of potential of being exploited to organize pump and dump schemes. Nevertheless, the pumpers must create demand for the tokens or the process goes in vain.

The listing process of a token on Uniswap is easy enough as well with the Metamask wallet. Currently, Uniswap lists a plethora of ERC-20 on its platform.

Do you think that DeFi pumps is the new trend in crypto? Please share your views with us.

Author: Nivesh Rustgi
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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Nivesh Rustgi 1180 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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