Uniswap stormed into 2021 with a roaring momentum that booked it a place on the list of the ten largest cryptocurrencies. Less than seven months after the launch of its UNI token, Uniswap has climbed up the list of most sought after and most utilized DeFi protocol.
The ERC-20 UNI token has already recorded a 760%+ price jump so far in 2021. With major upgrades in the pipeline, particularly the much-anticipated Uniswap V3 upgrade that rolls out in May, crypto industry experts, investors, and traders can’t help but wonder: how far up can UNI token prices go?
We hope to answer this and more similar questions by going through different UNI Token price forecasts by Uniswap investors and crypto industry experts. This price prediction guide will also look at UNI token’s price history, the factors influencing its ongoing bull rally, and possible future price performance. We, however, start by understanding Uniswap and how it works.
What Is Uniswap?
Uniswap is a decentralized exchange and one of the most popular Decentralised Finance (DeFi) protocols built on the Ethereum blockchain and primarily used to facilitate the exchange of cryptocurrencies. The Uniswap Organisation website describes it as a growing protocol ecosystem that is specially designed to:
“Empower developers, liquidity providers and traders to participate in a financial marketplace that is open and accessible to all.”
The decentralised exchange was created on 2nd November 2018 by Uniswap Company that was founded by Hayden Adams – a former mechanical engineer at Siemens. By the last quarter of 2020, the exchange had leapfrogged most of its established competitors – both centralised and decentralised – to become the largest decentralised exchange in the world and the fourth-largest cryptocurrency exchange overall by daily trading volume.
On 18th September 2021, the decentralised finance protocol went ahead and launched its own token – UNI – also known as the governance coin. Within days, the token was listed with virtually all the popular exchanges, led by Coinbase and Binance.
Its competitors include, Kyberswap, Pancakeswap, Simpleswap, and Serum DEX.
But how does Uniswap work, and what sets it apart from the competition?
How Does Uniswap Work?
Like traditional exchanges, Uniswap provides traders with a platform where they can exchange ETH-based tokens. But unlike traditional exchanges that use the order book model of trade, Uniswap embraces the automated market maker (AMM) model.
While traders in a centralized exchange are either trading against the exchange or other traders, the Uniswap decentralized exchange links allow users to trade against smart contract-based liquidity pools.
The model lives true to the spirit of decentralization by making it possible for virtually anyone to exchange cryptocurrencies, add tokens/liquidity to a pool, and even list a new token. It seeks to take away the key functions of exchange that has for the longest time been held by centralized exchanges.
Listing a new token on Uniswap exchange is free and permissionless – saving you the bureaucracies and exploitative listing fees charged by most centralized crypto exchanges.
The UNI coin that powers the decentralized exchange is also referred to as the governance coin as it gives the holder the right to vote in decisions affecting the exchange. When you contribute tokens to a given liquidity pool, you are given a token that is representative of your contribution to the pool.
For instance, if you contribute tokens worth $1000 to a liquidity pool that is valued at $100,000 you would receive a token share equivalent to 1% of the pool.
The 1% share gives you a voice to influence how the decentralized exchange is maintained, a 1% share of the UNI tokens earned from Liquidity mining, and an equivalent share of the profits made from transaction fees earned by the pool.
Currently, Uniswap charges a flat fee of 0.30% per transaction. And given that there is no central authority governing the exchange, all the fees go to the liquidity pool that facilitated trade. In most instances, the higher the liquidity translates to more transactions and, in effect, higher earnings. The fees are held in a reserve account and will be debited into your wallet when you exit the pool.
The May 2020 update (Uniswap V2) to the DeFi protocol, however, seeks to introduce radical changes aimed at helping the protocol compete favourably in the DEX market.
These include reserving 0.05% of the fees to fund future protocol upgrades, real-time access to your share of earnings (fees and mined UNI), and customized multi-tier fee schedules for different exchanges. The effect is, however, yet to take effect as it hasn’t been voted upon.
Now that you understand what Uniswap is and how it works, it is time to look at how to acquire and use UNI tokens.
Where To Buy And Use UNI Tokens
To understand how you can acquire UNI tokens, we first look at the UNI token distribution model created during the token launch.
During the launch of this cryptocurrency native to the DeFi protocol, Uniswap created 1 Billion UNI tokens. 15% (150 million UNI Tokens) of these were allocated to any Eth-based wallet that had ever interacted with the Uniswap protocol before 1st September 2019 – with each wallet receiving 400 free UNI tokens.
45% (45 million UNI TOKENS) has since been reserved for the Uniswap community and will be distributed to liquidity providers through liquidity mining. Note, however, there are only four liquidity pools that allow you to participate in liquidity mining, but more can be added in the future via a community vote. The four include ETH/USDT, ETH/USDC, ETH/DAI, and ETH/WBTC. 21.51% (215.1 Million UNI tokens) has also been set aside for the UNiswap development team and future employees and will be distributed in the next four years. 17.80% ( 178 million UNI tokens) and 0.69% (6.9 million UNI Tokens) have been allocated to Uniswap investors and advisors, respectively – to be distributed over the next four years.
You can, therefore, acquire UNI tokens by either becoming an investor, joining the Uniswap development team or the advisory board or simply locking a portion of your digital assets in eligible liquidity pools. Alternatively, you can buy UNI tokens on such popular crypto exchanges as Binance, Gemini, Coinbase, and Kraken.
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Uniswap In 2021: Everything You Need to Know About the UNI Token Price Jump
Uniswap tokens started the year trading within the $4 range. The last 100 days would, however, see the relatively new token outperform most of its competitors and even hit its all-time high of $38.13. The token’s value has been characterized by an aggressive uptrend characterised by rather few and short-lived price dips.
Uniswap investors and the crypto industry observers are confident that this UNI token bull run is just gaining momentum. They expect it to continue outdoing its past highs and setting new all-time highs in the coming months.
But how could the token pick such a bullish pace at a time while the global economy struggles to stay afloat?
Experts have pointed out several possible reasons. The most common being the ongoing crypto market rally and the recent DeFi explosion.
The pandemic has proved to be a blessing in disguise for the crypto industry. At the onset of lockdowns, curfews, and other economy-endangering policies aimed at taming the spread of covid-19, the world economy came to a halt, and the value of shares and other investments plummeted.
More people, from the average investor to Wall Street moguls and even celebrities, turned to cryptocurrencies. It started with Bitcoin, whose meteoric price jump eventually dragged the entire crypto industry – UNI tokens included.
Ethereum’s DeFi platforms have reported explosive growth over the last few years, with a record $17.5 Billion ETH locked up in DeFi contracts. Uniswap has found itself at the centre of this unprecedented growth due to its solid reputation, relatively low fees, and ease of use.
In the last three months, the decentralized exchange recorded considerable growth, as evidenced by the $200+ Billion trading volume reported on the platform from about 40+ million executed trades. The decentralized exchange has also seen the number of its liquidity providers soar to 72,000+ while the number of DeFi integrations grew to 200+.
How did the UNI token get here, though? How was the token’s price performance pre-2021?
Uniswap Price History: UNI Token Price Action Between September and December 2020
It is not unusual for both centralized and decentralized exchanges to establish operations and carve their own niches in the crypto market without necessarily launching native cryptocurrencies. This was Uniswap DEX’s case between 2018 and 2020. It went from a suggestion by Ethereum Blockchain’s creator Vitalik Buterin to one of the largest DeFi protocols in months.
The pressure to create a native cryptocurrency for the protocol started mounting when Uniswap’s first fork – Sushiswap DEX – went ahead and launched an ERC-20 token – SUSHI – for its DeFi protocol on 28th August 2020.
In response to its platform users’ demand and in a bid to wade off the competition presented by Sushiswap, Uniswap launched the UNI tokens on 17th September 2020. To date, information about its original price is scanty, but Coinmarketcap.com argues that the token was valued at $0.419 on its launch date. It would, however, close its first day of trade – 18th September 2020 – worth around $6.90 – up 1747%.
Image of UNI token price performance chart: Coinmrketcap.com
The new token, however, had a hard time finding a footing in the market as its prices soon plummeted. From late September all through to early November, UNI found it hard to break above $3.
It would nevertheless recover this loss in the last weeks of November and carry on the slow but steady momentum throughout December. In the last week of the month, the value of one UNI Token was averaging $4.50, but its daily highs were already testing the $6 price level.
According to crypto insiders, several factors helped create this bullish momentum for Uniswap and ready the token for the January breakout. These include the Ethereum price rally that had already gained momentum and dragging with it all the popular DeFi protocols – Uniswap included.
At the time, Sushiswap – its most formidable competitor – was facing a leadership crisis after the expulsion of their controversial founder and lead developer, Chef Nomi. Most of the DeFi trades and integrations were, therefore, routed to the UNI protocol. Similarly, Uniswap introduced small but significant updates to its platform, like the ability to trade anonymously, and they all had a huge impact in building the base for the bullish price rally being witnessed today.
Read Also: Bitcoin Vs. Uniswap: A Brief Comparison
Uniswap Price Predictions in 2021
Industry insiders, celebrity investors, have all spoken highly of the DeFi ecosystem, its unprecedented growth, and unlimited prospects for future expansion. They have even coined a term for it – the DeFi Explosion. Mark Cuban was among the first to express his optimism about this when he compared the ongoing DeFi explosion to “the early days of the internet.” A firm believer in cryptocurrencies and the DeFi protocols, Cuban is optimistic that the world is yet to see the best of such protocols as Uniswap.
His sentiments have been echoed by several investors and analysts who place UNI tokens price by December 2021 at between $30 and $85.
Here are some analyst predictions:
Ripple News is a cryptocurrency news and price prediction website. It uses technical analysis to study past price performance and determine to forecast future trends for the digital currencies.
Analysts are quite optimistic about Uniswap’s price outlook for the year. They believe that the Uniswap token prices will range between $30 and $50 for the better part of the year but may settle around the $40 range by the end of 2021.
Coinpedia, on the other hand, combines technical and fundamental analysis in coming up with price predictions for different digital currencies.
The site’s analysts are confident that the partnerships – DeFi integrations – established by Uniswap have played the biggest role in pumping the current bull rally. If the decentralized exchange continues attracting further linkages, Coinpedia is confident the coin may end valued at $85 by the very end of 2021.
Uniswap Price Predictions 2022 – 2023
Crypto price prediction websites have made forecasts for UNI tokens that extend well into 2022 and 2023. They all are bullish, convinced that the price of UNI tokens will continue rising moving forward. Interestingly, the three leading forecast websites do not see the price of UNI tokens rising above $100 in the next two years.
Long forecast is optimistic that the UNI token will double its value and start 2022 trading at $87.By the end year 2022 and early 2023, the token might have added $7 to its price, after which Longforecast analysts expect this price to stagnate and end the year 2023 trading at around $94.
Digital Coin Place
Though bullish, Digital coin price isn’t as optimistic about UNI token’s future price action as Longforecast.
For the year 2022, analysts expect the Uniswap coin to reach the highs of $63.51 and continue with a meek bull run that sees it end year 2023 trading at around $71.97.
Trading beats is even more reserved when it comes to Uniswap’s future outlook.
The platform predicts a stunted UNI token price growth that sees it start the year 2022 trading just $3 above its current price – $36 – and average $47 by December 2022. Their month-on-month forecast indicates that UNI token price may record some excitement in Mid-2023 and punch as high as $65 but will eventually slip and end the year, averaging $53.
Uniswap Price Predictions 2024 – 2025 and Beyond
Both the UNI token and the Uniswap decentralized exchange are relatively new. They haven’t accumulated sufficient data that can be used to accurately predict the token’s medium to long-term price action.
These, plus the fact that cryptos are highly speculative investment products, make it virtually impossible to come with an accurate forecast of the UNI token prices. Several analysts have nevertheless gone ahead and used the limited data available to come up with UNI price prediction for 2025 and beyond:
The economic forecast website uses technical analysis to predict the short- and long-term price direction of different financial products. Their Uniswap analysis for the next five years indicates that the token price may reach $352 in the first quarter of 2026.
Cryptocurrency Price Prediction
Coinpriceprediction is bullish about the price of UNI tokens. Their analysis of Uniswap’s price performance in the next few years is probably the most optimistic. The site expects one UNI token to be worth $560 by 2025 and $1,150 by 2030.
The Future of Uniswap: What Experts Are Saying About Uniswap’s Potential Growth
Uniswap started with a slack performance in its first two months before eventually picking pace and sustaining an uptrend for the past five months. This has helped it post a return of investment of 8360% (according to coinmarketcap.com), grow into the largest decentralized exchange in the world, and book a top spot among cryptocurrencies with the largest market capitalization.
Most crypto experts and investors – like Mark Cuban – are, therefore, quite optimistic about the future of popular DeFi protocols like Uniswap. Other factors that inform the crypto investor’s optimistic views about Uniswap’s future include:
The V3 update
Updates to a crypto protocol or blockchain have almost always nudged the associated altcoin or token prices upwards. Uniswap is expected to launch the Uniswap V3 update to its protocol in May 2021. It will be two-tiered, with the first layer L1 expected to be laid on the Ethereum blockchain on May 5th and the second layer L2 coming soon thereafter – according to the Uniswap website.
The much-anticipated update is expected to introduce a raft of radical developments to Uniswap that not only improve its ease of use but make it more competitive.
So far, Uniswap decentralized exchange has welcomed more than 200 DeFi integrations onto its protocol – with more on the way. A testament to its significance and popularity within the DeFi ecosystem.
In 2021, this popularity has started spilling into the outside world. Recently, the UNI token was added onboarded onto the list of cryptocurrencies that UK residents can buy with their Revolut challenger bank balances. Earlier in the year, Grayscale Investment LTD had filed the UNI token trust with the Delaware corporate registry.
Interest by crypto community
The crypto community is also expressing deep interest in Uniswap - if the google search volumes are anything to go by. The search for the term “Uniswap” reached its highest point ever in March 2021. Going forward, experts expect more crypto enthusiasts to buy into the fast-growing token, effectively driving the UNI Tokens up.
Conclusion: Will the Price of Uniswap Rise?
Uniswap’s expeditious surge in popularity and domination of the DeFi ecosystem and unequalled rise to becoming a large market cap instrument evokes optimism and reservations about the token’s future. Its proponents believe the wide reception the protocol has received so far is informed by the fact that it provides the best solution to the problem of centralized exchanges, which has rocked the industry since its inception.
Others worry that, given the number of decentralized exchanges in existence today and days past, Uniswap’s approach to the crypto exchanges isn’t viable, and we might be staring at a bubble. Some have also expressed concerns over its overdependence on the Ethereum blockchain and the stiff competition it continues to face from equally ground-shaking DeFi protocols.
There is no telling the price direction the UNI token will assume in the medium to distant future. But if the massive adoption, unmatched interest in the token by the crypto community, and its persistent bull run are anything to by, UNI tokens short term price promises to continue with its uptrend.
Using some of the Uniswap price predictions highlighted above by some of the crypto industry experts, this is how they expect the UNI token to perform in the next five years:
Uniswap Price Predictions For 2021-2025:
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