UniSwap is a name you should know about if you are planning to get in on the current DeFi craze which seems to be defined, to an extent, by extraordinary gains and potentially extraordinary losses – YAM farming comes to mind! Gains in multiples are made in hours and days, not weeks and months like the previous unregulated ICO boom.
There is a craze sweeping the crypto-verse, and its cause is decentralized finance (DeFi) largely made up of decentralized exchanges (DEXes), like Uniswap with the aim of replacing all “intermediaries” while also removing custody risks. DeFi is driven by several major areas including stable tokens, decentralized loans, decentralized exchanges, decentralized derivatives and decentralized financial process automation.
The barriers to entry required to access the DeFi /DEX craze are stupidly low. All you need is internet access, an on-ramp exchange to buy Ethereum with fiat, a MetaMask wallet and Uniswap. Due to the low barriers, people are joining DeFi in droves causing extraordinary pumps reminiscent of the ICO (initial coin offering) craze. If you happen to find a new token on a DEX and spend US$100 worth of Eth on it (~0.25 Eth), you can net double the weekly salary of a 40-hour minimum wage workweek, in minutes or seconds.
Marketing for DeFi tokens comes primarily through advertising on Telegram, Reddit, 4chan, and Youtube (we have seen this before). Telegram groups of DeFi enthusiasts, such as DeFi and MoonShot Hunters are routinely leading their fellow traders towards 50-100x gains within hours (or not). These DeFi Telegram groups boast a small but respectable average of 2,000 members. The hard to grasp part of all this is just the beginning of the DeFi/DEX craze.
What can the average DeFi day trader expect? An average investor could expect to see a 1000% trade, a 500% trade and a negative 100% trade (exit scam) all within the same day. If the ICO crypto boom was the ‘Wild Wild West’, this side of DeFi is like ‘the Colonisation of Mars without Governance’ (… but with Elon Musk as the Sheriff smoking with Joe Rogan!)
On a serious note this truly is a call back to the ICO boom of 2017 where information was both king and queen in an unregulated market. Just yesterday a new DeFi project, supposedly created by a maths Ph.D. student, took 1,000 ETH (circa US$425,000) and ran.
The key to the wild gains is also the key to the bad actors; unregulated exchanges are the best and worst of both worlds. Respectable channels dedicate their time to weeding out bad actors in the space, with a tier of systems ranging from level 1 upwards. They work in tandem to avoid bad projects and dig out the gems.
One of the critical indicators that DeFi is the next big thing is the migration of the most prominent ICO YouTubers to DeFi. OhHeyMatty, one of the top two ICO YouTubers of 2017/2018, has joined the DeFi movement. In his own words: “DeFi is ICOs on speed. Mixed with massive upside/volatility but also rampant with scams who fleece their victims in a matter of days instead of months.”. With bitcoin moving back to its ATH, the “old dogs” are looking for the next big thing, with interest in DeFi ramping up faster than anything before.
John McAfee is getting a piece of the DeFi pie:
John McAfee released his own coin “SWITCH,” before the DeFi/DEX craze, whose holders received his next project “GHOST,” airdropped. These tokens each increased 1,000% and 500%, respectively, in value. Within the last two weeks, the GHOST team has created two new uniswap coins: UniTrade and UniLayer. Both tokenized UI overlays for Uniswap. UniTrade released and performed over 1,000% throughout its release week.
UniLayer, on the other hand, only completed its ‘presale’ yesterday. As a result of the past performance of UniTrade, this presale sold out within 5 SECONDS. With a staggering US$1.6 Million raised in 5 seconds (Heavily oversubscribed) – this is only the beginning of the Uniswap madness. Only two months ago, Uniswap presales would raise a modest US$20,000.
Fast forward to present; the presales are now successfully raising between US$200,000 to US$500,000 on average. DeFi has a long way to go until we see >US$10m raised, but do not be surprised if DeFi starts to shoot through the targets that ICOs set. With Bitcoin gearing up to break its All Time High (‘ATH’) all the new money will eventually flow into DeFi. So it is in everyone’s best interest to get their feet wet with some DeFi sensation.
It’s clear DeFi has a way to go, with the total market cap a fraction of the overall market. All eyes are on DeFi and exchanges, like Uniswap, are paving the way for DeFi to reach the masses.
The DeFi Frontliners MSH are a group of experts working in the heart of the movement. This is a live reflection of what is happening on a day to day basis. Nothing written in this article constitutes financial advice and does not reflect either the views of City AM or those of Crypto AM.