Uniswap raised an additional $11 million from major VCs as the probability of a token increases so let’s find out more in the cryptocurrency news sites today.
After the $1.8 million seed round back in 2019, the decentralized exchange Uniswap raised an additional $11 million in a Series A funding round which was led by a16z to create V3 of the protocol. This has sparked discussions again regarding the potential governance token for the Uniswap protocol. Uniswap’s latest capital raise will be used to improve the protocol and to create a third iteration of the DEX which will enhance the capital efficiency and will add new features. The trading platform earned funding from major tech funds such as Union Square Ventures and PArafiCapital alongside Paradigm.
The shares in the company behind the protocol, Universal Navigation Inc, were sold to investors and the second version even introduced a fee of 0.5% which can be turned on and off. The fee is off right now with a $1.5 billion volume, Uniswap LCC would have earned $750,000 from this. The investors will likely capture value from the 0.05% protocol fee once it is turned on. Since the shares in the company were sold to investors, there’s still room for a governance token which holders vote on how the protocol works. However, the reluctance of the team to use a governance token as a fundraising vehicle could mean that the team has a desire to keep the platform without a token.
Uniswap got a lot of popularity in the past year as more DeFi projects were built on Ethereum, and the protocol provides automated liquidity provision on Ethereum driving what could be described as “unstoppable” liquidity for hundreds of applications. However, these features also seem to attract many scammers. According to a report from Defi Prime, there could be a lot of coins on the platform that impersonates legitimate projects and trick users into swapping their funds for a worthless token.
Uniswap hits record volumes, while it was launched in 2018 as a smart contract protocol that allows for a new automated token exchange on Ethereum. Even though the exchange is nearly two years old, its popularity came only this year as the DeFi space attracted a lot of retail and institutional investors. It has already eclipsed some of the top crypto exchanges in the United States in terms of trading volumes.
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