In a remarkable surge, Uniswap's governance token UNI climbed from $3.6 to over $20 within a month, achieving a circulating market capitalization of $5.5 billion. This performance not only surpassed established centralized exchange tokens like OKB and HT but also positioned UNI just behind Binance Coin (BNB) in market value.
The rally is closely tied to unprecedented trading activity on Uniswap. Data from The Block Research reveals that Uniswap processed over $30 billion in trading volume in January alone—a new all-time high. For context, Uniswap’s monthly volume in September was $15.4 billion, which at the time exceeded Coinbase’s reported volume.
Upcoming developments, including the launch of Uniswap V3 and new governance treasury mechanisms, have further fueled investor optimism. Many community members believe UNI’s current performance is only the beginning.
This surge coincided with the “retail trading revolution” in U.S. equities, where individual investors targeted heavily shorted stocks like GameStop (GME). After several centralized trading platforms restricted trading on GME, critics pointed to decentralized alternatives as a fairer model. Robert Leshner, founder of Compound, publicly urged users to embrace DeFi in response.
UNI Tops $20 as Market Cap Nears BNB
Starting from December 29, UNI began a sustained upward trend. By the end of January, the token broke through $20—a monthly gain of 455%. While major assets like Bitcoin traded sideways, UNI stood out as one of the best-performing tokens.
UNI is the governance token of Uniswap, the largest decentralized exchange (DEX). Within just five months of its September launch, it overtook several long-standing centralized exchange (CEX) tokens in market cap.
As of February 2, UNI’s circulating market cap reached $5.5 billion, ranking 12th among all cryptocurrencies. Among exchange tokens, only Binance’s BNB, at $7.7 billion, was larger. By comparison, OKB and HT were valued at $1.57 billion and $1.39 billion, respectively.
UNI’s rapid appreciation has turned Uniswap into a standout success story, demonstrating that DEXs can compete directly with major CEXs.
Record-Breaking Volume Drives Growth
Uniswap’s trading volume milestone offers insight into UNI’s powerful January performance.
The Block Research reported that total DEX volume exceeded $60 billion in January, with Uniswap accounting for more than half—over $30 billion—averaging $1 billion in daily volume.
After announcing these results, Uniswap founder Hayden Adams noted that the platform’s daily volume had reached 2% of the New York Stock Exchange’s and pondered aloud when it might match it entirely.
Back in September, Uniswap’s monthly volume of $15.4 billion surpassed Coinbase’s $13.6 billion. The latest numbers show a near doubling of volume in just a few months, driving interest—and value—in UNI.
Google search data for “Uniswap” also hit its highest level since late September 2020, indicating growing public interest.
Uniswap V3 and Governance Expectations Boost UNI
Beyond trading volume, Uniswap’s 2021 roadmap—including the launch of V3 and new governance features—has raised expectations for the platform’s future.
The team plans to introduce a new automated market maker (AMM) design in V3, aimed at improving capital efficiency, flexibility, and user experience for both traders and liquidity providers.
Key upgrades will include lower latency, faster settlement, and reduced transaction costs—addressing critical pain points for DeFi users dealing with Ethereum network congestion and high fees.
Hayden Adams shared a preview of the V3 interface on Twitter on February 2, asking for community feedback and hinting at more updates in the coming weeks.
Uniswap’s rise has been largely fueled by product innovation, especially its AMM model. With V3, the platform aims to further solidify its lead.
LinkVC founder Lin Jiapeng speculated that the combination of ETH 2.0 and Uniswap V3 could help the DEX eventually surpass the combined volume of top centralized exchanges.
In addition to technical improvements, the community is anticipating new uses for the governance treasury. The Uniswap team has committed to greater participation in governance in 2021, while capping their own voting influence at 10% of their UNI holdings to preserve community control.
On January 19, Adams revealed that $500 million (based on then-prices) from the community treasury was available for use. He invited proposals on how to deploy these funds.
Suggestions ranged from a second airdrop for Uniswap users to forming a venture arm to invest in crypto projects and accelerating layer-2 scaling solutions.
One community member noted that the treasury contains already-unlocked UNI from the total community allocation. While no specific plan is confirmed, many expect new incentives—such as buyback programs—that could further boost UNI’s value.
Other factors contributing to UNI’s rise include the end of liquidity mining emissions in mid-November, which reduced selling pressure, and the locking of over $116 million in UNI across liquidity pools.
“Retail Revolution” Shines Light on DEXs
The rise of UNI occurred alongside the “retail revolution” in U.S. equities. Individual traders coordinated on Reddit’s Wallstreetbets forum to bid up shares of GameStop (GME), inflicting heavy losses on hedge funds like Melvin Capital.
An ERC-20 version of GME was even launched on Uniswap, illustrating the overlap between crypto and traditional retail sentiment.
However, when brokerage platforms like Robinhood restricted trading in GME, many cried foul. Compound’s Robert Leshner declared that the “game is rigged” and called for broader adoption of DeFi. He argued that traditional markets are opaque and fragile, while DeFi offers fairness, transparency, and self-custody.
Although not directly involved, Uniswap and other DEXs were highlighted as non-custodial alternatives that prevent third-party interference.
It remains unclear how many traditional investors have migrated to DEXs, but institutional interest is growing. Grayscale Investments, for example, recently filed for several DeFi-related investment trusts. As a core DeFi primitive, DEXs like Uniswap are well-positioned to benefit from this attention.
On social media, many have encouraged users to try decentralized exchanges for a more open and equitable trading experience.
Beyond Uniswap, other DeFi tokens also posted impressive gains in January. SUSHI rose 381%, AAVE jumped over 250%, and tokens like CRV and COMP also performed strongly.
Amid turmoil in traditional markets, decentralized finance is emerging as a compelling alternative—and Uniswap is leading the way.
Frequently Asked Questions
What is Uniswap?
Uniswap is a decentralized exchange (DEX) built on Ethereum. It uses an automated market maker (AMM) system, allowing users to trade cryptocurrencies without intermediaries.
Why did UNI’s price increase so rapidly?
UNI’s price rose due to record-high trading volumes on Uniswap, anticipation of the V3 upgrade, and growing interest in community governance and treasury management.
How does Uniswap’s trading volume compare to centralized exchanges?
In January, Uniswap’s monthly trading volume exceeded $30 billion—higher than many major centralized exchanges. This demonstrates growing adoption of decentralized trading platforms.
What is the Uniswap V3 upgrade?
Uniswap V3 aims to improve capital efficiency, reduce transaction costs, and enhance the overall user experience. It is one of the most anticipated updates in the DeFi space this year.
What is the “community treasury” in Uniswap?
The community treasury holds UNI tokens allocated for governance purposes. Token holders can propose and vote on how to use these funds, such as for grants, investments, or user rewards.
Can DEXs like Uniswap replace centralized exchanges?
While centralized exchanges still dominate in liquidity and user base, DEXs offer greater transparency, self-custody, and resistance to censorship. Many see them as a viable alternative for certain types of trading.
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