Uni Gains Ground, Miners Offload BTC, & MEV Profits Tighten

FEB 08, 2022 • 3 Min Read

Joo Kian

DISCLOSURE: DELPHI VENTURES HAS INVESTED IN BTC, ETH, COWSWAP. MEMBERS OF OUR TEAM ALSO OWN CRV AND CVX. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

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Uniswap Gaining in Stableswaps

  • In May 2021, when V3 was released, Uniswap began to eat into Curve’s market share. This was further exacerbated by the launch of 0.01% fee pools which provided an advantage over Curve. Due to the comparable price execution in V3 alongside a severe undercutting in fees, Uniswap has been able to match Curve’s volumes in stableswaps, turning this into a nearly 50/50 market in a little over six months. What’s even more impressive is that Uniswap has done this with virtually nil emissions. Compare that to Curve which emits $2M in CRV per day ($750M annualized). So what is the secret sauce that has let Uniswap compete with Curve in its own game?
  • Uniswap V2 utilized a constant product formula of x * y = k to determine the price of an asset. To ensure liquidity across all potential prices, Uniswap spreads an LP’s assets across the entire price curve from 0 to infinite. With V3 came the concept of concentrated liquidity – a more efficient way to provide liquidity and generate returns within a fixed price band. In the case of stablecoins, v3 allows LPs to provide liquidity in a very tight range, say from $.99 to $1.01, allowing for significantly enhanced capital efficiency over V2. The introduction of Uniswap V3 alongside 0.01% fees allowed for the creation of hyper-efficient pools for stablecoins that operate at extremely high utilization rates.
  • Delphi members can read more in our latest Convex/Curve report here.
Pay Less Gas with Gem

  • As we highlighted in a previous Daily, the NFT aggregator competition has been heating up. Genie and Gem are two NFT aggregator platforms making it easy to shop across a number of NFT marketplaces. Both make it easy to bulk purchase NFTs in a single transaction.
  • Gem, which more recently launched, has a strong focus on gas optimization. Gem’s superior fee execution (calculated in yellow) consistently amounts to 30-40% less in gas fees relative to Genie. This markedly better execution has allowed Gem to quickly become a strong competitor.
Miners Stop Accumulating
  • Miner net position gives the change of supply held in miner addresses. The green bars on the chart display periods where miners have been accumulating. Red bars are periods where they were offloading their holdings.
  • Over the past 2 months, miners have been continuously accumulating BTC, even as prices fell from 55k to 35k.
  • With the weekend pump, miners are starting to offload their BTC holdings as Miner Net Position Change turned negative for the first time in 2 months.
MEV Profits Slow

  • MEV profits are starting to slow down over the past 2 weeks, with the lowest profitable day only earning $172K.
  • Spikes in profits mostly occur during volatile days where there’s an increase in volume and high-slippage trades.
  • As covered in our previous Daily, CowSwap, a unique DEX Aggregator that allows for MEV-protected swaps, has achieved its highest monthly volume. This is likely to impact MEV profits as there are fewer opportunities for MEV attacks.
  • For more coverage, see read our previous deep-dives on MEV and CowSwap.
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