DEX goals diverge as SushiSwap (SUSHI) and Uniswap (UNI) rally to new highs

The goals and development of SushiSwap and Uniswap are diverging as each exchange’s governance token reaches new all-time highs.

Uniswap and SushiSwap have emerged as two of the top decentralized exchanges (DEXs) that are leading the current DeFi bull run higher.

Despite a controversial start for SushiSwap, the last few months have seen it catching up to Uniswap in terms of activity on the platform, total value locked, and the price of its SUSHI governance token.

A recent report from Delphi Digital took a closer look at the two projects and broke down the fundamental differences in the way that each has diverged in their development since SushiSwap’s vampire attack on Uniswap.

SUSHI vs. UNI price. Source: TheTIE

SushiSwap originally emerged as a fork of Uniswap v2 with the inclusion of the SUSHI governance token which was distributed to participants of the community.

At the time, Uniswap had yet to launch the UNI token which would subsequently be airdropped to users who had interacted with the protocol either by trading or providing liquidity.

While UNI had likely been planned for release at some point, many saw the surprise airdrop as being a bid to stop a potential vampire attack that would drain the liquidity from Uniswap to SushiSwap.

After a bumpy start which saw SushiSwap co-creator Chef Nomi dump all of his SUSHI tokens on the market for $14 million worth of Ether (ETH), only to later return those funds to the treasury, SushiSwap co-founder ‘0xMaki’ took over as the lead on the project and helped it to correct course and become a viable contender among DeFi platforms.

Total value locked on Sushiswap. Source: Defi Llama

When it comes to comparing the original token distribution, 65% of the original UNI supply was distributed to the community through liquidity mining and a governance-controlled treasury versus 80% of all SUSHI tokens.

In this regard, the SushiSwap platform has emerged as a more community-controlled project that is self-funded with 9% of all SUSHI emitted from the system awarded to the treasury. In contrast, Uniswap has received some VC backing with a total of $12 million being raised from various sources to help fund future development.

SushiSwap is more decentralized than Uniswap

Differences in the path of development began soon after the fork and led to two distinct platforms that offered a different experience. The excitement continues to build for the release of Uniswap v3, although only a handful of insiders know exactly what the new version will entail.

While users and token holders trust the lead developers which have created an incredible interface thus far, many in the cryptocurrency space prefer a project with more transparency and community involvement.

SushiSwap keeps more to the community ethos of cryptocurrency in this way, with a core team of developers that is more transparent about what is coming and where the project is headed in the future.

SushiSwap also has established an effective governance system that allows community members to have a say in important decisions. The governance system for Uniswap is less conducive to community involvement, which could be the result of the rushed release of the UNI token and a desire to create a solid foundation before integrating community governance.

Divergence in value proposition and community involvement

Over the past few months, the Uniswap team has been focused on building out v3. As Delphi Digital pointed out, Uniswap’s first-mover advantage has provided the platform with a bevy of integrations as the platform was sought out by projects across the sector for the liquidity it provided.

SushiSwap on the other hand has been busy establishing connections with other burgeoning DeFi platforms, most notably the yEarn ecosystem which includes yEarn, Cream, Pickle, Cover, and Alpha. This will help increase the use of SushiSwap’s liquidity offerings and help make the platform more resilient to upcoming challenges.

SushiSwap vs. Uniswap pool liquidity. Source: Dune Analytics

More recently, SushiSwap has begun to incentivize liquidity for longer tail assets as it looks to establish itself as a place to get access to projects with long term viability. In contrast, Uniswap has been a way for new projects to get a head start on liquidity and community exposure.

One of the most significant differences between the two platforms relates to cash flow generation.

In March of 2021, the UNI community will have the ability to divert 0.05% of all fees on the platform to the Uniswap treasury which is governed by the UNI token. The fees will accrue in the treasury and UNI token holders will be able to vote on what to do with those funds in the future.

SushiSwap has had the 0.05% fee in place since it was created in September 2020 and the governance council agreed that the money generated is used to purchase SUSHI directly and award it to stakers, providing a source of direct income.

In terms of fees generated, Uniswap clearly comes out on top for the time being. With a larger number of available trading pairs and huge liquidity pools for top coins, the Uniswap platform sees higher volumes and this translates into more cash flow for liquidity pools and UNI token holders.

Uniswap vs SushiSwap volume. Source: TheTIE

But with fees going to a treasury rather than directly to token holders, UNI has been more appealing to investors with a longer-term outlook who prefer the approach of “accumulating capital in the treasury during the early years.”

So SushiSwap offers a more community-oriented and governed system that provides direct income to token holders from fees generated on the platform while Uniswap is working on a long term plan to create a one-stop DEX that meets every traders’ needs.

First mover advantage and dominant liquidity pools have allowed Uniswap to compete with the likes of Coinbase in terms of trading volume and long-time cryptocurrency advocates appreciate this accomplishment.

Weekly DEX volume. Source: Dune Analytics

SushiSwap has risen from the ashes to create a community-driven project that those just getting into crypto can appreciate for its ability to generate immediate income.

SUSHI has also seen a recent spike in trading volume on Uniswap, showing that the fight for the title of top DEX is just getting started in these early rounds of the crypto bull cycle.

SUSHI volume on Uniswap. Source: Glassnode

The DeFi sector is just beginning to gain attention from the traditional financial sector and as the liquidity, total value locked and price of each platform’s governance token reaches new highs for both Uniswap and SushiSwap it will be interesting to watch as the two platforms continue to diverge in development.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Here’s how multi-leg options allow traders to profit from $2K Ethereum price

Using multi-leg options can give traders a less risky way to invest in Ethereum price as it pushes above $2,000.

This week Ether (ETH) price finally broke through the $2,000 level as aggressive institutional inflow through Grayscale Investments products and declining exchange reserves signaled that buying pressure was increasing.

While many traders are skilled at using perpetual futures and the basic margin investing tools available on most exchanges, they may be unaware of additional instruments that can be used to maximize their gains. One simple way, albeit expensive, is buying Ether call option contracts.

Ether 60-day historical volatility. Source: TradingView

For example, a March 26 call option with a $1,760 strike trades at $340. In the current situation, the holder would only profit if Ether trades above $2,180 in 39 days, a 21% gain from the current $1,800. If Ether remains flat at $1,800, this trader will lose $300. This is certainly not an excellent risk-reward profile.

By using call (buy) options and puts (sell), a trader can create strategies to reduce this cost and improve the potential gains. They can be used in bullish and bearish circumstances and most exchanges offer easily accessible options platforms now.

The suggested bullish strategy consists of selling a $2,240 put to create positive exposure to Ether while simultaneously selling a $2,880 call to reduce gains above that level. These trades were modelled from Ether price at $1,800.

Two out-of-the-money (small odds) positions are needed to protect from the possible price crashes below 20% or Ether gains above 130%. Those additional trades will give the trader peace of mind while also reducing the margin (collateral) requirements.

Profit / Loss estimate. Source: Deribit Position Builder

The above trade consists of selling 1 Ether contract of the March 26 put option with a $2,240 strike while selling another 1 Ether contract of the $2,880 strike. The additional trades also avoid the unexpected scenarios for the same expiry date.

The trader needs to buy 0.73 Ether contracts of the $4,160 call in order to avoid excessive upside losses. Similarly, buying 1.26 Ether contracts of $1,440 puts will protect against more significant negative price moves.

As the estimate above shows, any outcome between $1,780 and $3,885 is positive. For example, a 20% price increase to $2,160 results in a $478 net gain. Meanwhile, this strategy’s maximum loss is $425 if Ether trades at $1,440 or lower on March 26.

On the other hand, this strategy can net a positive $580 or higher gain from $2,240 to $3,100 at expiry. Overall it yields a much better risk-reward from leveraged futures trading, for example. Using 3x leverage would incur a $425 loss as soon as Ether drops 8%.

This multiple options strategy trade provides a better risk-reward for those seeking exposure to Ether’s price increase. Moreover, there is zero upfront funds involved for the strategy, except from the margin or collateral deposit requirements.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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Exchange tokens benefit as centralized exchanges battle with DeFi platforms

Exchange tokens catch a boost as governance and high yields attract fresh inflows and CeFi begins to merge with DeFi.

Fresh institutional and retail investor inflows into the cryptocurrency market have led to bull market conditions for many top tokens from blue-chips like Bitcoin (BTC) and Ether (ETH) to more recently established DeFi projects like AAVE and Synthetix (SNX).

Exchange tokens are another easily overlooked sub-sector of the market but they have been performing exceptionally well in 2021 as increases in trading volumes results in a larger pool of fees to collect when the exchange’s native token is used for settlement. Native exchange tokens are also typically used as the base pair for funding new listings and token buybacks.

Here are three of the top-performing exchange tokens in 2021 that continue to see upside potential as new investors flood into the market.

Similar to the experience of CryptoKitty users in 2017, the decentralized finance community has discovered that the main drawback of increased usage of the Ethereum network is high gas fees and long transaction times.

As a result, centralized exchanges and their associated native tokens have seen renewed interest as new features like staking, yield farming and collateralization allow investors to profit from holding their investments. These new offerings also allow investors to participate in DeFi-like offerings without worrying about impermanent loss and they also receive access to the latest coin listings.

BNB/USDT

Binance Coin (BNB) recently experienced a price breakout to a new high of $349.13 on Feb.19 as the top exchange by volume evolves both its centralized and decentralized exchange capabilities alongside further upgrades to the Binance Smart Chain.

BNB/USDT 4-hour chart. Source: TradingView

Several DeFi-related projects, including Venus (VNS) and Linear Finance (LINA) launched on the BSC in recent weeks which utilizes the BNB token to pay transaction fees on the network.

Binance also offers a continually expanding list of “investment products” that allow users to lend their tokens to the exchange pools in return for varying degrees of yield opportunities depending on lock-up periods and token demand.

Popular coins are quickly added to the growing list of tokens with options or futures trading capabilities, offering something for both devoted community members as well as pessimists who would rather take their chance at shorting newly listed assets.

Trading volume dominance and the benefits of having the first-mover advantage point to further upside potential for the Binance ecosystem and BNB.

Binance’s steady expansion and its active project incubator and Binance Smart Chain are designed to challenge Ethereum’s dominance in the sector, thus there remains a strong possibility that BNB could see an extension of recent gains.

FTT/USDT

The traditional finance and cryptocurrency markets are slowly beginning to merge and developing products for all types of traders. In 2020, derivatives exchanges also increased in popularity and their trading volumes steadily rose to new highs on a weekly basis.

Following the U.S. government crackdown on controversial derivatives exchange BitMEX, the door was opened for a newer, more community focused option to fill the gap.

FTX Token (FTT) is the exchange token for the FTX cryptocurrency exchange which got its start in the summer of 2019. For much of that first year, FTT traded below $2 with an average trading volume of $2 million as the exchange worked on establishing itself and attracting new users.

The exchange began to see an uptick in activity in 2020 which coincided with an increase in trading volume for FTT as well as its price.

As the platform expanded, additional functionality was added to the token which now includes fee rebates, staking and a ‘Buy & Burn’ mechanism that helps decrease FTT’s circulating supply to increase token value.

FTT/USDT 4-hour chart. Source: TradingView

Since Dec.11 when FTT was trading at $4.12, a surge in buying volume which reached a peak of $270 million on Feb.19 has propelled FTT to a new record high of $35.01 as the exchange is rapidly becoming the go-to derivatives exchange for the cryptocurrency community.

KCS/USDT

KuCoin Shares (KCS) has been a late bloomer in this bull market, maintaining a relatively flat token value until the beginning of February when a sudden uptick in trading volume helped elevate KCS price from $1.19 on Feb.2 to a recent high of $3.99 on Feb.19.

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for KCS on Feb. 18 when it reached a high of 66, less than 24-hours before the price breakout.

Cointelegraph Markets Pro – VORTECS™ Score (green) vs. KCS price

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

A scroll through the project’s Twitter feed shows that on Feb.4 the biggest announcement coming out of the exchange was the listing of the popular blockchain-based video streaming platform Theta, which had previously been difficult to obtain for U.S. residents.

KuCoin also offers a growing list of tokens available for derivatives trading along with various ways to earn through staking or providing liquidity, with fees generated by the platform distributed to token holders who keep their KCS staked on the exchange.

DeFi hype overshadows exchange token gains

DeFi may be dominating the conversation in the cryptocurrency sector right now, but major issues including gas fees remain a barrier to widespread adoption.

While the roll out of layer two solutions may offer some relief to this problem, concerns about liquidity across separate blockchains continue to pose significant barriers to a smooth, low-cost trading experience.

Many who are chasing the DeFi hype fail to realize that popular token listings and lower trading fees have led to a resurgence in the use of centralized exchanges.

This translates into a larger user base that conducts more transactions, leading to an increase in trading volumes and healthy price appreciation for underlying exchange tokens like BNB, FTT and KCS.

Centralized exchanges still capture the majority of trading volume and this does not appear to be changing anytime soon. While decentralized exchanges like Uniswap and SushiSwap are growing in prominence and beginning to eat into the market share of centralized exchanges, they still comprise only a small portion of total trading volume seen in the cryptocurrency market.

The battle between exchanges is continuing to heat up and as long as this is the case, the increased inflow to exchange tokens could lead to future upside.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Study: Top-Tier Cryptocurrency Exchanges Increased Their Market Share by 13% Since October 2020

Study- Top-Tier Cryptocurrency Exchanges Increased Their Market Share by 13% Since October 2020A recent study unveiled that top-tier cryptocurrency exchanges increased their market share since October 2020, in the context of lower-risk exchanges. The bitcoin bull market fueled that both retail and professional traders utilized such risk, data shows. Stricter Regulations Boosted Transparency Levels in Crypto Exchanges Per information from crypto market data provider cryptocompare.com, top-tier crypto […]
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REN price rallies 60%, hitting a new high after recent DeFi integration

REN price spiked to a new all-time high shortly after its recent integration with Binance Smart Chain.

Ren (REN) price underwent a strong 65% breakout on Feb.19 as the interoperability-focused protocol saw continuing accumulation from whale wallets holding more than 1 million REN.

Data from Cointelegraph Markets and TradingView shows that REN rose from $0.99 on Feb. 18 to establish a new all-time high of $1.84 on Feb. 19. The move to a new high occurred as REN’s trading volume also reached $704 million over the past 24-hours.

REN/USDT 4-hour chart. Source: TradingView

Attention for the protocol received a noticeable uptick at the end of January when it was announced that Dogecoin (DOGE) would be integrated with REN, enabling the trading of renDOGE in the growing DeFi ecosystem.

Since that time the REN ecosystem has continued to expand as more top-tier projects like Filecoin (FIL) have undergone the transformation to become renFIL, which is now being considered for addition to the AAVE ecosystem.

Binance Smart Chain integration strengthens REN’s use case

REN was trading at $0.94 on Feb. 15 before it was announced that RenBridge 2 was live and integrated with the Binance Smart Chain. Since that time, the trading volume has steadily increased as well as the total value locked on the RenVM.

Total value locked on REN. Source: Defi Llama

VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for REN on Feb. 18, prior to the recent price rise.

The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

Cointelegraph Markets Pro – VORTECS™ Score (green) vs. REN price

As seen in the chart above, the VORTECS™ score began to increase following the announcement of RenBridge 2 on Feb. 15 and reached a peak of 81 on Feb. 18, shortly before the price of REN began to spike upwards.

The recent integration with BSC has brought renewed attention to REN which was hampered by high transaction costs on the Ethereum network.

With decentralized finance heating up, interoperability between blockchain networks is becoming essential for a well-functioning market and REN is emerging as a key piece in cross-chain interaction.

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