Uniswap is clearly the biggest decentralized exchange on the market today. It has also undergone an upgrade when V2 was introduced. Interestingly enough, there is still nearly $4 million in liquidity “stuck” in Uniswap v1, for some reason.
Uniswap v1 Isn’t Dead yet
When this DEX transitioned from version 1 to version 2, many people assumed all of the liquidity would migrate along with it. Albeit that happened for the most part, there are a few millions worth of liquidity on the old platform. One has to wonder why this is the case. After all, this liquidity could have been “forced migrated” if needed..
Then again, Uniswap is all about putting the user in control. It is their job to manage and control the funds and liquidity they provide. Doing so is not difficult and the switch to version2 of the platform was announced well in advance. As such, theUnisw current situation raises even more questions.
What is even more remarkable is how this “stuck” liquidity still generates decent trading volume. This confirms users are still relying on Uniswap v1 for their own reasons. An interesting situation, for sure. With 954 transactions in the past 24 hours, something seems to be going on behind the scenes.
In terms of liquidity, Monolith TKN, DAi, and USDC are the main sources to look into. There is also some liquidity for Wrapped Bitcoin, sETH, Numeraire, MKR, There are dozens of other pairs. While some of the “stuck” funds have been withdrawn recently, everything remains in limbo, generating revenue from fees.
Crypto Twitter Weighs in
This particular topic has sparked some interesting conversations on Twitter. For some users, this is another sign of Ethereum’s gas problems. Spending money on Ethereum’s blockchain can be incredibly expensive. This may be a reason why this liquidity is not moving across the network. It may simply be too costly to move anything.
Another potential reason is people losing access to their private keys. Uniswap is primarily used through wallets such as MetaMask. If someone formats their hard drive or switches to a different PC altogether they may not have noted down the recovery phrase. As such, the remaining liquidity can no longer be accessed.
Regardless of what the reason is, this is a remarkable development. The cryptocurrency industry provides freedom, but also introduces a lot of responsibility. Based on these statistics, up to $4.5 million in “responsibility” may be lost forever.
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