The liquidity of the Uniswap crypto exchange turned out to be four times less than Binance
Date: 2023-08-28 Author: Karina Ziganova Categories: BLOCKCHAIN
Kaiko analysts have released a report comparing liquidity on centralized cryptocurrency exchanges (CEX) and decentralized exchange (DEX) Uniswap.
The experts analyzed market depth data from several CEXs, including Kraken, Binance, Bybit, Bitstamp, Kucoin and Deribit, as well as Uniswap V3. The report considers the wETH/USDT pair on Binance and Uniswap as one of the most liquid.
What the Kaiko report says
As a result, it appeared that the Uniswap fee pool for the pair was less liquid than that of Binance at most price levels. Binance has more than four times the liquidity of Uniswap.
“The liquidity distribution of Uniswap V3 is surprisingly symmetrical, which suggests that liquidity is fairly widely distributed,” Kaiko said in a report.
Although Uniswap V3 had less liquidity compared to Binance, the largest DEX outperformed all major CEXs for the wETH-wBTC pair. Moreover, the 0.3% and 0.5% fee pools for this pair offered six and three times more liquidity, respectively.
At the same time, for smaller cryptocurrencies, such as Curve DAO Token (CRV), Uniswap has less liquidity compared to the five most liquid centralized exchanges that offer the CRV/wETH pair.
Uniswap overtakes Coinbase
Uniswap has overtaken crypto exchange Coinbase in terms of spot trading volume for two consecutive quarters. So, in the second quarter of 2023, the largest DEX processed transactions worth approximately $110 billion, compared to $90 billion for Coinbase. In addition, Uniswap's $155 billion in volume surpassed Coinbase's $145 billion in the first quarter of this year.
The reason for the reduced performance of the American crypto exchange is the bear market. Coinbase's drawdown was 83% compared to Q4 2021.
