Uniswap's decentralized exchange has emerged as one of the critical pieces in the decentralized finance sector, with the DEX benefiting from the first-mover advantage after it became the get-to commutation for new projects and traders in 2020.

In late 2020, 400 UNI tokens were distributed to all wallet addresses that previously provided liquidity on the platform at at its height thhe impromptu airdrop was worth north of $3,500.

Past late Oct of 2020 the DeFi market place has sold-off sharply and this pinned UNI cost below the $4.00 mark for weeks simply since the showtime of 2021, UNI token has gained 335% and reached a new all-fourth dimension high at $15.35 on January. 27.

UNI/USDT four-hour chart. Source: TradingView

At the moment, the driving forces behind the rise in the price of UNI are an increment in daily volume transacted on the platform, the rising in the platform's total value locked, and the roll-out of governance features as the Uniswap v3 launch approaches.

Full value locked continues to rise

Monitoring the full value locked (TVL) of a DeFi protocol is one of the primary metrics used to determine its legitimacy and how involved the community.

A rise TVL indicates that users of the platform trust the platform enough to eolith their funds to earn rewards and it typically means that the liquidity pools are more than competitive than other exchanges in the sector.

The Uniswap platform recently established a new all-fourth dimension high TVL of $iii.xvi billion on January. 24, and this was additional by an increment in the price of many of the top cryptocurrencies likewise every bit popular DeFi tokens.

Total value locked in Uniswap. Source: Defi Pulse

Uniswap is now the top-ranked DEX in terms of TVL, and when it comes to lending the platform ranks 4th equally Maker (MKR), AAVE and Chemical compound (COMP) lead in this area.

Uniswap's trading volume competes with the peak centralized exchanges

A 2nd driver of UNI'south recent surge is the sharp rise in trading volume on the exchange.

Data from Uniswap shows the DEX's daily volume is consistently higher up $400 one thousand thousand since the get-go of 2021 and the metric surged to a new high at $1.3 billion on Jan. 11. This level of book now places Uniswap in competition with some of the top centralized exchanges in cryptocurrency.

Uniswap 24-hour volume. Source: Uniswap

Transactions on Uniswap likewise surpass those of its direct competitors and data from Dune Analytics shows that in early on 2019 the principal competitors were Kyber Network and IDEX.

Monthly DEX volume. Source: Dune Analytics

Since that fourth dimension the number of DEXs has continued to expand but past March of 2020 Uniswap had established itself as the preferred pick for traders and it has remained the ascendant DEX into 2021.

Excitement surrounding the v3 rollout bolsters UNI cost

While many airdrop recipients were elated to sell their tokens shortly after receiving them, those who chose to hold on to them now accept the ability to receive extra benefits with the addition of governance features.

The Uniswap Treasury currently has $500 1000000 in it and recently Uniswap founder Hayden Adams asked the community "what are some of the about impactful means governance tin can allocate this UNI?"

As the list of delegates for the Uniswap platform continues to abound, demand for UNI token is probable to increase every bit more UNI are locked on the platform for governance purposes.

Excitement around the upcoming Uniswap v3.0 continues to build and in addition to new governance features, solutions for the high gas fees and improvements to the impermanent loss structure are expected.

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