The September 16 announcement from Uniswap to issue a token and conduct an airdrop caught the DeFi industry entirely by surprise. The magnitude of the airdrop and the broad distribution among the community caused a lot of excitement on crypto social media.
Some users sold their tokens immediately after they had claimed them and did not participate in the following price increases. Several users reported receiving various airdrops since they were using different Ethereum wallets to trade on Uniswap.
The airdrop was allocated to every user who had transacted on the Uniswap protocol. Liquidity providers and SOCKS redeemers/holders received additional tokens.
Uniswap originally started off as a project by Hayden Adams. At the time when he started working on Uniswap he was unemployed and did not know how to code. A grant from the Ethereum foundation enabled him to dedicate his efforts towards developing the protocol.
The launch of Uniswap was officially announced in November 2018. The name Uniswap was inspired by Vitalik Buterin himself who had described the idea for Uniswap previously in a blog post.
Right from the beginning Uniswap captured the interest of the Ethereum community because of its incredible user friendly interface and the novelty of the approach. The protocol gained massive popularity during the boom of Ethereum’s DeFi ecosystem in summer 2020.
A Series A investment round under participation of the famous Silicon Valley venture capital firms Union Square Ventures and a16z was announced in early August 2020. Together with the airdrop it was announced that the investors will be vesting their UNI tokens over a time horizon of four years just as the team members.
The UNI token airdrop occurred to more than 250,000 Ethereum wallets. The approach that the team and the investors choose has been described as very generous towards the community. 57% of the tokens allocated had already been claimed by the users on September 18:
One of the immediate effects of the airdrop was that Ethereum set a new record for the number of transactions processed:
As a consequence the already high Ethereum transaction fees increased sharply. Several users reported pending transactions for claiming their tokens due to network congestion.
Uniswap is in competition with both major centralized exchanges, Coinbase and Binance. The response from the centralized exchanges was extremely fast and they both listed the UNI token on their exchange in record time.
Coinbase made the token available on their professional trading site Coinbase Pro and their retail outlet Coinbase. An enormous trading volume was the result:
To the surprise of many the price increased massively in the aftermath of the airdrop. Many users had already sold their UNI in the 2$ range immediately after they had received the airdrop.
However, on September 18 the price of UNI exceeded 6.50 USD valuing the standard airdrop that a Uniswap user received at 2,600 USD which is more than twice the stimulus check of the US government.
The total circulating supply for UNI in the next 4 years will be 1 billion UNI. On a fully diluted basis this would value the decentralized exchange above 6 billion USD.
The Uniswap airdrop was not covered in mainstream media despite making big waves in the crypto community. This shows that the mainstream is so far ignoring important evolutions in the crypto industry.
It remains to be seen how DeFi will react once the mainstream catches up to the recent development in Ethereum’s boom sector.
The possible implications of the Uniswap airdrop go far beyond the token economics of the Uniswap protocol. The approach that Uniswap has chosen might become a role model for future decentralized companies. Other companies may proceed in a similar way and reward the early user base for their support.