UNISWAP: Bear, Bull, or Unicorn Market?

    A look into the recent user acquisition on Uniswap (Ethereum) and the behavior of that cohort of new wallets.

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    UNISWAP: Bear, Bull, or Unicorn Market?
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    Uniswap v3 on Ethereum is realizing a sharp increase in new users in the month of May. In this dashboard, a new user is defined as a wallet that has made its first transaction (swap or liquidity provision) within the last 12 months.

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    While new users are trending up, the trend of new users whose first interaction with Uniswap v3 on Ethereum is liquidity privision is trending downwards.

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    When looking at new user behavior in the calendar month following a wallet's first Uniswap v3 on Ethereum transaction, retainment is increasing in absolute terms but is relatively flat as a percentage of total new customers.

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    Looking at the top 1000 wallets by transactions over the last 12 months, new users that have had a first Uniswap v3 on Ethereum transaction in the last 12 months account for over half of all transactions in that same time period. This is the result of their share of total transactions increasing gradually over the last 12 months.

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    New user transaction volume is trending up, correlating with the increase in new users over the past 12 months. Meanwhile, the percentage of those transactions that are liquidity provision relative to swaps is declining sharply.

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    NEW USERS OVER THE LAST 12 MONTHS
    NEW USERS VIA LIQUIDITY PROVISION
    NEW USER MONTH-TO-MONTH RETENTION
    TOP 1000 WALLETS: SHARE OF VOLUME BETWEEN NEW AND EXISTING USERS
    NEW USER TRANSACTION VOLUME OVER LAST 12 MONTHS
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    CONCLUSION

    Uniswap v3 on Ethereum is realizing a sharp increase in new users and new user transactions over the past 12 months. This increase paired with a decrease in liquidity provision from these new users within the same time period could indicate that a looming bull market is anticipated, as new users look to both enter trades on Uniswap while seeming less interested in owning the risks associated with liquidity provision - namely impermanent loss and missing out on quick run-ups of token prices.