Why Uniswap Is So undervalued ? King of DEXs?
Last year, the world’s three largest stock exchange operators grossed $7.3 billion in profit. Combined, these companies have a global market value of $92.4 billion. They are money machines. All they do is sit in the middle and match buyers and sellers.
Now, they do it very efficiently. And they do it very quickly. That’s why they make so much money. When seconds can mean the difference between making thousands on a trade or millions, traders are willing to put up with their fees.
For crypto, Uniswap saves users time and money. You don’t need to send your tokens to an exchange, wait an hour, trade, and then send the crypto back to your wallet. It can all be done almost instantly through Uniswap’s wallet and on-chain. In return, it collects a smaller fee than the big exchanges today.
We see Uniswap as the hands-down king of DEXs. And as it takes its place at the top, UNI holders will benefit through a potential 0.05% fee change in the coming months.
To gauge what UNI is worth, let’s assume the fee gets implemented – which we believe will happen in the coming months.
Since September 1, Uniswap has averaged $386.7 million in volume per day. If it were to merely maintain its market share – based on UNI holders earning 0.05% in fees on this volume – over the course of a year token holders can pull in just north of $70.5 million.
By January 2021, UNI’s total circulating supply is expected to be nearly 240 million tokens. This would work out to be just over 29 cents per year per token in earnings.
Now, to get a starting point for what the market pays for these earnings, let’s look at three publicly traded exchanges and their price-to-earnings (P/E) ratio.
[P/E ratio measures a company’s share price compared to its earnings per share. A lower P/E ratio generally means a greater value.]
CME Group: 25.65
InterContinental Exchange: 26.65
Nasdaq: 26.45
Average: 26.25
So investors are willing to pay an average of $26.25 for every $1 in earnings.
Using an average P/E ratio of 26.25 would give UNI a price of about $7.73. At the time of this publishing, UNI was trading around $3.0078 So it’s already trading at a more than a 59% discount compared to traditional exchanges.
The same way Amazon owned e-commerce by making it easy for people to buy online, Uniswap is in a position to dominate the trading of ALL assets, not just crypto because it’s made it easier and far cheaper to use than traditional exchanges.
And because of the design of the blockchain, it can do this with just a handful of people. Think about that: Uniswap is dominating all crypto trading with just 10 people. The top three exchanges – Binance, Kraken, and Coinbase – have a total of 2,469 people on their teams.
It took Uniswap less than two years... only $11 million dollars... and only 10 employees to reach the same trading level it took Coinbase 5.5 years, 1,200 employees, and $500 million in capital to reach.
I need you to understand how disruptive that is. If I were a Coinbase, Binance, or Kraken shareholder... I’d be very worried right now.
As a cheaper, faster, and easier option, Uniswap is going to eat their lunch.
Now, they do it very efficiently. And they do it very quickly. That’s why they make so much money. When seconds can mean the difference between making thousands on a trade or millions, traders are willing to put up with their fees.
For crypto, Uniswap saves users time and money. You don’t need to send your tokens to an exchange, wait an hour, trade, and then send the crypto back to your wallet. It can all be done almost instantly through Uniswap’s wallet and on-chain. In return, it collects a smaller fee than the big exchanges today.
We see Uniswap as the hands-down king of DEXs. And as it takes its place at the top, UNI holders will benefit through a potential 0.05% fee change in the coming months.
To gauge what UNI is worth, let’s assume the fee gets implemented – which we believe will happen in the coming months.
Since September 1, Uniswap has averaged $386.7 million in volume per day. If it were to merely maintain its market share – based on UNI holders earning 0.05% in fees on this volume – over the course of a year token holders can pull in just north of $70.5 million.
By January 2021, UNI’s total circulating supply is expected to be nearly 240 million tokens. This would work out to be just over 29 cents per year per token in earnings.
Now, to get a starting point for what the market pays for these earnings, let’s look at three publicly traded exchanges and their price-to-earnings (P/E) ratio.
[P/E ratio measures a company’s share price compared to its earnings per share. A lower P/E ratio generally means a greater value.]
CME Group: 25.65
InterContinental Exchange: 26.65
Nasdaq: 26.45
Average: 26.25
So investors are willing to pay an average of $26.25 for every $1 in earnings.
Using an average P/E ratio of 26.25 would give UNI a price of about $7.73. At the time of this publishing, UNI was trading around $3.0078 So it’s already trading at a more than a 59% discount compared to traditional exchanges.
The same way Amazon owned e-commerce by making it easy for people to buy online, Uniswap is in a position to dominate the trading of ALL assets, not just crypto because it’s made it easier and far cheaper to use than traditional exchanges.
And because of the design of the blockchain, it can do this with just a handful of people. Think about that: Uniswap is dominating all crypto trading with just 10 people. The top three exchanges – Binance, Kraken, and Coinbase – have a total of 2,469 people on their teams.
It took Uniswap less than two years... only $11 million dollars... and only 10 employees to reach the same trading level it took Coinbase 5.5 years, 1,200 employees, and $500 million in capital to reach.
I need you to understand how disruptive that is. If I were a Coinbase, Binance, or Kraken shareholder... I’d be very worried right now.
As a cheaper, faster, and easier option, Uniswap is going to eat their lunch.
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