That’s the surprising thing about the latest Uniswap dump that you didn’t know about
From dominating the DEX market (decentralized exchange) to the introduction of its L2 Alpha solution via the Optimistic Ethereum (OΞ) -Mainnet, Uniswap has managed to stay afloat. However, recently there has been talk in the community that a large number of tokens of this Defi protocol are being sold.
The DeFi Education Fund, financed by Uniswap, converted half of the donations into stablecoins. How Bitcoin magazine reported the fund’s Twitter account revealed that it sold 500,000 UNIs to Genesis Trading in exchange for USDC 10.2 million in an OTC transaction. However after to plan Initially, the fund will liquidate 1 million UNI holdings within 4 to 5 years.
This unexpected move has created undesirable havoc in the marketplace. Everyone in the community took the opportunity to criticize Uniswap. From marking the dump to concerns about the governance of the protocol, Crypto-Twitter had mixed opinions.
However, do token holders need to worry about the consequences of this sell-off? At this stage, everything seems to depend on whether the sell-off affects UNI’s on-chain metrics.
According to the data from In the block, the In / Out of the Money indicator (profit / loss – compares the average price of the purchased tokens with their current price) shows that most addresses are losing money. This is clearly an indication that the price at the time of writing is much lower than the average cost merchants would have spent to buy it.
In fact, at the time of writing, there are 146.47,000 addresses with losses compared to the previous 87.55,000 profitable addresses. No wonder Address number more losses than profitable addresses. The loss of addresses hit a whopping 142.36k, while profitable addresses hit just over 90,000 (92.81,000 to be precise).
Well, the difference between this indicator and the In / Out of the Money indicator is pretty small. The “In / Out of the Money” indicator takes into account all transactions made by all addresses in the entire history, while this indicator focuses only on the most recent transactions made by addresses with token balances. Accordingly, it can be assumed that UNI’s profitability aspect will not be affected by the sale.
Average transaction size | Source: IntoTheBlock
Next, the average trade size also indicates another interesting trend. The total trade value of the tokens, which dropped from 7/7 to 12/7, changed direction and started rising after the 13th, the day the DeFi Education Fund announced the dump. However, caution should be exercised in the profits of this indicator as the trade can be either a buy or a sell trade.
On the flip side, the drop in exchange volume shows that UNI tokens have exited the exchange, suggesting that people have bought more than they sold in the past few days. 25.6 million UNI in exchange on 7.9. declined to 25 million on July 14.
In fact, the balances on the stock exchange have formed an unusual ladder pattern since the end of June and if the same trend continues, further UNI volumes in private wallets can be expected in the next few days.
UNI balance on all exchanges | Source: Glassnode
Looking at the undisturbed condition of the above key indicators, it can be concluded that the extent of the landfill is not too large. In fact, at the time of writing, UNI is trading at $ 16.92 after falling nearly 4% in the past 24 hours.
UNI / USD Price Chart | Source: Tradingview
This is surprising and very important because not the results you would expect after a massive sell-off like this one.
While the sell-off doesn’t have a huge impact on the index or UNI price, it should be noted that everyone, including DeFi Watch founder Chris Belec, is expecting more transparency in this area. In view of the growing demands for more regulatory oversight, only time will tell whether such transparency will occur in the foreseeable future.
At home at home
According to AMBCrypto