Active wallets grow on the leading Polygon exchange
The leading Polygon exchange QuickSwap is hot on the heels of its major Ethereum rival Uniswap having amassed almost 100,000 unique active wallets in the last 7 days. Just 40,000 shy of Uniswap’s weekly figure.
A battle is raging in the world of decentralized exchanges where the long-standing leader Uniswap is under threat of losing its crown to a relative newcomer. Importantly, this hasn’t occurred overnight. Instead, QuickSwap’s rise to prominence has been built off the back of the 2021 bull run. Where a thirsty group of new investors seeking low fees and fast transactions entered the space and found themselves presented with far more options than those of us that entered years ago.
Fundamentally QuickSwap offers an identical service to Uniswap with the bonus of greatly reduced fees and significantly faster transaction times. Two things that have become paramount to success as Ethereum DeFi dapps battled against high gas fees caused by increasing usage of DeFi applications. In some cases leading to the migration of dapps from Ethereum to Polygon to better serve their audiences.
The question of value
Looking at the number of active wallets interacting with the dapps smart contracts gives us an indication of the dapps usage. Going deeper it’s important to note that the real value in dollars is still flowing through the leading Ethereum exchange and that average transactions on QuickSwap have a much lower value than those on Uniswap.
This is not surprising given the fact that Uniswap has long been the home of token swaps on the blockchain. It has a loyal user base of high-value transaction clients that do not mind paying gas fees to move large amounts of capital. In comparison, QuickSwap has attracted a new wave of investors. With smaller pots to play with and arguably coming from the traditional finance world where fees are low and transaction times fast.
With just shy of 140,000 active wallets and $5.16 billion, an average transaction in the last 7-days on Uniswap is worth around $36,857. With just shy of 100,000 active wallets and $511 million, an average transaction in the last 7-days on QuickSwap is worth around $5,110. A big difference in value but nonetheless a seriously impressive performance from QuickSwap. A DeFi application that only launched in February 2021.
Additionally, looking at the total value locked (TVL) within each protocol we see the gap more clearly. QuickSwap has a TVL of $1.1 billion while Uniswap is boasting over $11 billion.
This point can be shown further by looking at the number of transactions processed on each network per day. Ethereum is currently processing around 1.1 million transactions a day, while Polygon is processing around 5 million per day. The point is that a high number of active wallets doesn’t indicate increasing value creation.
Furthermore, it is worth noting that PancakeSwap, an exchange operating on Binance Smart Chain has already surpassed Uniswap in regards to active wallets. In the last 7 days, PancakeSwap boasts almost 1 million active wallets. Additionally, it is closing in on Uniswaps value creation ability and not just its active wallet count. Again showing the changing dynamics of the DeFi sector in 2021.
Nonetheless, if QuickSwap can overtake Uniswap in the number of active wallets it attracts in the near future it would indicate a shift in audience. A shift from a landscape that saw big investors moving hundreds of thousands of dollars to one of lower budget participants staking their claim as crypto investors. Of course, it is important to remember Ethereum still has an ace up its sleeve in the form of their 2.0 update that could radically alter the landscape once more for competing DeFi services. The battle for DeFi supremacy is just getting started and ultimately it’s the communities of investors that will decide its fate.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in ETH, BTC, ADA, NIOX, AGIX, MANA, SAFEMOON, SDAO, CAKE, HEX, LINK, GRT, CRO, SHIBA INU, AND OCEAN.