Why Uniswap is the DeFi Catalyst for Many Projects

If there is one thing made perfectly apparent in the last year, there is incredible demand for decentralized finance (DeFi) solutions.  

In the past 12 months alone, DeFi solutions have become one of the dominant uses for blockchain technology. The total value of assets (TVL) locked up in DeFi platforms has been sent soaring — climbing from just $850 million one year ago, to an all-time highest value of $26.17 billion (and growing) this week. 

Among these DeFi platforms, Uniswap has emerged as arguably the biggest draw, as thanks to Uniswap, traders now have a way to trustlessly trade practically any ERC-20 with excellent liquidity. Likewise, investors have also been provided with a new way to turn a profit on their idle cryptocurrency holdings, by providing liquidity to one or more Uniswap liquidity pools and earning a fraction of the fees it generates as a result.   

The TVL of Uniswap is increased by more than 10,000% in a year. (Image: DeFi Pulse) 

But in recent months, Uniswap has become more than just a simple decentralized exchange platform. It has also become the first stepping stone for projects looking to expand their DeFi capabilities.  

This, because the holders of tokens supported by Uniswap can now easily earn a yield on their assets as liquidity providers (LPs), while also gaining access to several other DeFi use cases for their assets — such as yield farming and liquidity mining by staking their LP tokens at supporting yield farms. This makes listing on Uniswap the first tangible step into DeFi for many crypto projects.  

Several prominent projects have already begun taking advantage of Uniswap as part of their early foray into the DeFi sector.  

This includes NewsCrypto, a hub for cryptocurrency enthusiasts and traders that provides a wealth of tracking and analytics solutions. After announcing the NewsCrypto Coin (NWC) launch on two other blockchains (Ethereum and Binance Smart Chain) earlier this month, NWC is now available to trade on Uniswap — marking the beginning of the project’s DeFi ambitions.  

https://twitter.com/NwcPublic/status/1353688657035718656 

With NWC now listed on Uniswap, users will not only be able to exchange other ERC-20 assets for NWC and vice-versa easily. Still, they will also provide liquidity to NWC token pools — earning a share of the fees generated by the pool as a result.  

A similar approach was also taken by tBTC, a Bitcoin-backed token that opted to launch on Ethereum as an ERC-20 token to allow BTC holders to easily mint tBTC tokens (which are 1:1 backed with real BTC) and use them with the myriad Ethereum DeFi apps — including Uniswap.  

tBTC is now integrated into several other platforms, including 1inch and Kyber Network, demonstrating the DeFi expansion that can occur after simply listing on Uniswap.