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Uniswap claims to be better in crypto market liquidity than Coinbase and Binance

The crypto market’s centralised and decentralised exchanges (DEXs) have always been at conflict with one another. On 5th May Uniswap, the world’s largest decentralised exchange, claimed to be better than its competitors Coinbase and Binance in terms of crypto market liquidity.

This occurs because Uniswap provides stronger incentives to liquidity providers while also providing better prices to traders. According to Uniswap Labs, the current version of Uniswap DEX, which was released last year, allows traders to make large-sized deals in the price range of their choice.

The study compares liquidity across Uniswap and other controlled exchanges using the market depth indicator. Market depth indicates how much of one asset can be traded against another at a particular price level. According to research, ETH/USD trading pair, a trade completing $5 million in a single transaction can save over $24,000 on Uniswap V3 when compared to Coinbase.

Uniswap, on the other hand, has a long way to go before catching up to Binance. The Uniswap V3 now handles $1.7 billion in daily transaction volumes. Binance handles $22 billion, whereas Coinbase handles over $3 billion. Dan Robinson, co-author of the current Uniswap latest research told, told Bloomberg:

“The fact that this liquidity exceeds even major centralised players illustrates how swiftly crypto and global markets are adapting to innovations in decentralisation”.

Uniswap uses an automated market maker method via a smart contract to calculate the price of exchanging one cryptocurrency to another. Users on Uniswap have the option of providing liquidity to any of the liquidity pools and earning fees on trades. This eliminates the need for exchanges to rely on high-frequency trades for market making.

Read more:

Is Uniswap selling unregistered securities?

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