Why is this DeFi exchange a one-way ticket for Ethereum’s ERC-20 tokens?

Uniswap is a decentralized exchange with a unique mechanism for trading ERC-20 tokens on its platform. Apparently, it’s the perfect platform for pumping tokens. CryptoGainz, prominent crypto trader, tweeted,


There is no order book to scare or sell buyers, just a bullish narrative and a sell-side liquidity crisis

Uniswap rates the price of a token based on the balance between Ethereum and token. In the case of a successful trade or exchange, the value is added according to the Ethereum exchanged for the token. Hence there are no order books or even real sales pages.

This is better than a traditional cex as the fomo is unbridled. There is no order book to scare buyers or encourage them to sell, just a bullish narrative and a sell-side liquidity crisis

CryptoGainz, a well-known crypto trader, listed.

The plentiful instance

In the past few days, the volume at Uniswap has been comparable to Coinbase and Binance. Qiao Wang, a crypto and financial analyst, tweeted:

Uniswap has achieved a volume of USD 126 million in the last 24 hours. This is 1/3 of Coinbase. 1/2 of octopuses. More than Gemini, Polo and Binance US put together.

In addition, more than half of the volume on Uniswap was trading with $ AMPL.

AMPLEFORTH / USD chart on Coingecko (source)

On June 23rd last month, Ampleforth was listed on Uniswap. A week after the listing, the price jumped to new highs. However, after a massive surge, the price of the token fell below the consolidation level before rising to $ 0.6.

It is backed by prominent investors such as Pantera Capital, Arrington XRP Capital, Coinbase CEO Brian Armstrong, etc. Nonetheless, the abnormal increase and the subsequent decrease seems highly suspect at the moment.

Sufficient, a legitimate Ponzi, has a fully diluted cap of $ 1.3 billion. I don’t know what glue you all want on this thing, but it’s clearly the next absolute wreck story waiting to be happened.

Eric.eth, an Ethereum developer and podcast host, tweeted

Hence, the dump may be even faster if the tokens are pumped through targeted liquidity with a lack of actual consumption. Listing on derivatives exchanges and other popular CEX also increases the likelihood of dumps.

For Uniswap the idea was to create a simplified DEX platform. However, it has great potential to be used for the organization of pump and dump systems. Nevertheless, the pumps must generate the demand for the tokens, otherwise the process will be in vain.

Listing a token on Uniswap is also easy with the Metamask wallet. Uniswap currently lists a large number of ERC-20s on its platform.

Do you think DeFi pumps are the new trend in cryptography? Please share your views with us.

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