Uniswap is one of the fastest growing assets, communities and protocols in the entire industry. Here are 5 reasons why investors are potentially considering investing in Uniwap (UNI) in their Crypto IRA.
1. Decentralized Exchanges Growing
Decentralized Exchanges (DEX) have seen a rapid growth in popularity and usage. This can be attributed to the rise of DeFi tokens in the last summer of 2020 and user’s focus on non-custodial exchange of assets. Their centralized counterparts have seen insolvency, regulatory troubles, hacks, troublesome UX which has pushed people towards seeking a decentralized solution.
In addition, DEX’s have majorly improved their user interface, experience and liquidity. Uniswap is the world’s most popular and largest decentralized exchange by trade volume and continuous upgrades have helped keep it competitive. It even does more volume than Coinbase, the largest publicly traded Crypto Company in the US.
2. Trading & Investing Becoming Mainstream
There seems to be a grand awakening amongst the public regarding financial aspects of life. The general trend shows that people are now more willing to invest than save. This phenomenon might be attributed to the significant money printing and the wide realization that the inflation rate is rising. Hence, people are looking for opportunities and venues to invest.
Uniswap is uniquely positioned to benefit here as most of the people have rising interest in the crypto-market. The largest platform having the most projects running on it is Ethereum and Uniswap is the number one place where people come to exchange value and assets. The Uniswap DEX has seen massive traffic lately from DeFi, NFTs, the newest meme coins (Dogecoin, Shiba Inu etc.) projects. It’s likely to continue in the future and of course, the UNI token holders will benefit.
3. Real Revenues & Cash Flows
The chief metric to determine the profitability of a company is real revenue and cash flow data. Uniswap can be valued using similar traditional finance investment metrics. Uniswap has been generating more than double the fees of the world’s premier crypto-asset – Bitcoin! This means that Uniswap is providing more real life usage and value than Bitcoin.
Uniswap volumes show a similar story. The trade volume generally is in billions of dollars and on particular occasions, even crossed the $10B mark. This is great evidence of the protocol’s health, usage and continued relevance in the growing DeFi field. It’s the largest DeFi protocol in terms of volume processed and fees generated. UNI token holders will eventually receive a part of this “cash flow”, once the protocol’s governance turns it on. Uniswap currently has a Price to Sales ratio of below 20, which is considered a value investment in the traditional equity space.
4. Strong Community & Price Performance
UNI token was introduced in Sep ‘20 through a retroactive airdrop program. It means that all people (or the addresses) that interacted with the protocol or provided liquidity to it, during a certain time period were eligible to receive the airdrop. This ensured a proper distribution of tokens to protocol users – known as a fair launch. This creates a grass root community and promotes decentralized governance. Uniswap is integrated with almost all major DeFi protocols, due to it’s importance in providing a core DeFi functionality of asset exchange.
Since it’s inception, UNI token has performed remarkably. It faced a high selling pressure early in it’s life, because of the wide distribution and general propensity of general users to sell airdrops. However, it bounced back and has appreciated well in price since then. It has seen an ROI of over 600%, if the tokens were purchased or kept since the original distribution date.
It’s not surprising considering the potential cash flow value capture mechanism, stake in the governance and the patronage it has received from VC firms/partners. A number of respected venture capital funds have invested in the UNI token, which is representative of their trust in the product and confidence in its future direction. These include Andreessen Horowitz. Union Square Ventures, Version One, Parafi Capital, Variant, SV Angel, A Capital, Coinbase and many more.
5. Potential Oracle Solution
Uniswap is not only an AMM. Due to its unprecedented nature and success, it is finding utility for other purposes. Vitalik Buterin – Ethereum founder recently proposed that Uniswap should become an oracle token, providing reliable price feeds to the smart contracts. It’s suited for that purpose, because of it’s deep liquidity and heavy usage, ensuring that prices aren’t manipulatable on the protocol and others can benefit from the same. This will benefit the ecosystem, because it will further decentralized the Oracle space which is currently dominated by Chainlink (LINK).
Virtually all DeFi protocols and functionality requires a decentralized and reliable oracle, as smart contracts require external information to function properly. Vitalik Buterin specifically wants the Uniswap oracles to serve algorithmic stablecoins, which need the accurate prices of underlying collateral to maintain their peg and health. This is a huge market, which can generate a continuous stream of profits for the UNI token holders, over the long term. Uniswap is a trusted name and it’s oracles have a chance to become an industry standard once launched and made available to third parties.
Uniswap in your IRA / 401k
If you are interested in the potential of investing in Uniswap within your IRA / 401k retirement accounts, head to www.iTrustCapital.com to learn more.
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