Why did UNI fall (Is it worth investing in UNI)?

Why did UNI fall? According to TokenGazer data analysis, as of 17:00 on August 6th, the price of UNI token was $90.48, with a total market value of approximately 5.36 billion Chinese yuan, an increase of 13.7% compared to yesterday; the 24-hour trading volume on Uniswap reached $2.6 billion, a decrease of 11.6% compared to the previous day.

In addition, as of the time of writing (18:01 Beijing time), the price of UNI has dropped below $4, hitting a historical low of 13.03 USDT today. There are two reasons for the fall of UNI:

First, the price of UNI is related to market sentiment.

From the chart, it can be seen that UNI has performed very well in the past 30 days.

The second factor is the increased demand for DeFi protocols and cryptocurrencies in the market, with the top three tokens in terms of locked assets on Uniswap being UNI, YFI, YFII, SNX, and COMP. Why did UNI fall?

Firstly, there is a lack of expectations for the development of DeFi projects in the market, which raises the question of why DeFi projects are not progressing.

The second reason is that UNI itself does not have enough market demand, and it remains to be seen if it can grow as expected in the future.

The third reason is the existence of a huge bubble in the current DeFi protocol and cryptocurrency market, and many investors cannot withstand this risk.

Is UNI worth investing in?

Editor’s Note: This article is from Odaily Star Daily and is reproduced with permission.

The governance token UNI of Uniswap reached a high point of $15 in August, but this number is not as high as we imagined. According to the official announcement of Uniswap, it has now launched a testnet and is undergoing Beta testing (specific timing will be announced on the official website), and the project is expected to launch its mainnet in the next few months.

From an article by Uniswap founder Hayden Adams, it can be seen that although Uniswap does have over 70% of the user base, it lags behind in terms of trading volume; and according to the disclosed information, currently about 40% of the active users of UNI are in a loss state.

However, I believe that one factor that makes UNI worth investing in is its decentralization and liquidity mining mechanism. I believe people may have different opinions on UNI because it has a high degree of sustainability and incentives. This means that if UNI is undervalued or lacks sufficient funding support, it may be favored by investors in the long run.

I suggest not to overestimate UNI. UNI is an open-source and permissionless network that anyone can use, and anyone can publish content on it. It can help developers build new applications or platforms faster. In addition, UNI can also promote ecosystem development by community voting to decide whether to join the ecosystem and receive rewards. Therefore, UNI should be able to become the next generation of cryptocurrencies. UNI also provides a special feature: “It is a network composed of a protocol.” This new protocol is designed to allow anyone to create a blockchain independent of other users (such as Ethereum, Solana) on which smart contracts reside. Therefore, as long as users agree to the features they want (such as paying gas fees, etc.), they are allowed to participate in the network.

For those who want to get more incentives, Uniswap is undoubtedly one of the most suitable assets for them. (Note: uni-yi.org domain) http://u.today/news/unist/uni-wrapped

uni-wrapped is the governance token UNI on Uniswap V3. It is issued based on the ERC20 format of ETH and is used to incentivize liquidity providers for liquidity mining, creating value for UNI holders. When Uniswap’s liquidity providers start generating income, they can earn profits by increasing the supply of UNI tokens while contributing value by increasing the UNI price and its circulating market value.