No. 1 DEX Makes a Move as NFT Market Heats Up
Uniswap, the No. 1 decentralized exchange, started letting investors buy NFTs with ERC-20 tokens, the protocol said Wednesday.
The move is designed to bolster Uniswap’s burgeoning NFT business after its acquisition of Genie. The NFT trading marketplace is heating up with new entrants, such as Blur.
Saving Gas Fees
Under the Uniswap plan, users may purchase NFTs with a single ERC-20 token and eventually buy NFTs using multiple ERC-20 tokens, the Uniswap team said.
This feature allows users to bypass converting their ERC-20 tokens into ETH/WETH for the sole purpose of purchasing NFTs, thus making this step redundant, and helping save users on gas fees.
Powering this feature is Uniswap’s universal router which sells the buyer’s ERC-20 token for the token seller has listed their NFT for, after which the trade is settled using OpenSea developed Seaport protocol.
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On June 21, 20222, Uniswap announced that it had purchased Genie for an undisclosed sum.
In November 2022, Uniswap revealed that it had enabled trading NFTs on its platform, and that it rebranded Genie to Uniswap NFT aggregator. A USDC airdrop was handed to eligible users, and a gas rebate program was announced.
Despite this, Uniswap NFT aggregator has seen a sharp decline in both its trading volume, and number of transactions.
Since its introduction, the platform’s trading volume fell from nearly $246,000 to almost $20,000. While the number of transactions fell from 446 to 36, according to a Dune Analytics dashboard.
Uniswap NFT aggregator’s direct competitor Gem, which was acquired by OpenSea in April 2022, was quick to point out that it allowed its users the ability to buy NFTs with ERC-20 tokens back in 2021.
Competition in the NFT marketplace is heating up. The latest entrant in the space, Blur, has taken the market by storm, due to its aggressive token incentive strategy. It now commands 82% of trading volume in the last seven days, according to Dune Analytics.
Onetime market leader OpenSea slashed trading fees, to no avail. Uniswap’s governance token UNI has increased more than 10% in the last 30 days compared to a 6% uptick for Ether, according to data from The Defiant Terminal.