UNI Soared 24% As Community Decides To Extend UNI Reward Program

UNI soared 24% as the community voted and decided to extend the UNI reward program in just two days of trading as we are reading more in our altcoin news.

The UNI/USD pair reached a five-day high of $4.010 during the early morning session with the upside move. UNI/USD pair reached a $4.010 price during the early morning session and UNI soared 24% right after the community voted during a governance proposal that will extend their reward program for liquidity providers. The program expired on November 17 which coincides with the coin’s price drop to a weekly low of $3.23.

Uniswap operates as an automated market marker which arranges liquidity from its users to run a decentralized exchange. It then, pays them a yield in the form of UNI and beneficiaries can choose to sell the native token in the open market for other assets and to use their UNI ownerships and to vote in order to make changes for the protocol. One such yield farming program happened this week and consisted of four ETH-based liquidity pools which were yielding 583,333 UNI each which eventually propelled the total value locked with UniSWAP to the top of the DeFi list.

After November 17, most of the Uniswap reserves migrated to rival yield farming projects and the liquidity provided by Uniswap users was lower by 50% which is lower than the previous $3.06 billion. Bancor and Sushiswap on the other hand had their liquidity pools ballooning after introducing farming reward programs. The price of one SUSHI token increased by 54% in the last two days.

This move prompted the UniSwap community to launch a rival yield farming reward as it seems that now traders think the program’s revival will be bullish for UNI. As a result, they increased their token exposure in the past two days. according to Jeff Dorman, the chief investment officer at ARca, the total number of value locked inside the liquidity pools will not determine the governance token’s value as he said:

 “Uniswap pools had more liquidity than needed to facilitate trading, and the excess liquidity left once UNI farming ended. This doesn’t affect volumes. TVL is pointless for Uniswap when there is more capital than needed. Uniswap’s TVL started going up at the end of August, & has now “crashed” back down to where it was 3 months ago. But Uniswap’s volumes peaked BEFORE TVL even increased, and volumes went down while TVL went up.”

Dorman said that Uniswap’s customer base is better than the one of its rivals which means that the protocol will still perform well as long as it puts capital to use in a productive manner.