First Mover: Uniswap’s Sudden $5B Token Valuation Cements Comeback From ‘Vampire Mining’ Attack

Earlier this week, analysts with the cryptocurrency analysis firm Arcane Research were musing that new developments appeared to have slowed in the fast-growing blockchain arena of decentralized finance, known as DeFi. But they predicted any lull was likely to be temporary.

“A new boost for DeFi tokens could be right around the corner,” Arcane wrote Tuesday in a report. “The sector seems determined to grow further.”

As if on cue, the decentralized exchange Uniswap late Wednesday made a surprise delivery of its new governance tokens to anyone who had ever used the project. Traders each got at least 400 of the UNI tokens, worth about $1,200 – prompting some witty commentators to call  it “stimulus for Ethereum users,” since it was the same amount as the coronavirus aid checks mailed out earlier this year by the U.S. Treasury Department. By mid-day Thursday, more than 50,000 addresses were holding UNI tokens.

The project also allocated tokens to its team members, investors and advisers, for a total supply of 1 billion of the UNI coins. And just like that, the token issuance gave Uniswap an implied market token valuation of $3.7 billion on a fully diluted basis, making it instantly one of the largest projects in DeFi and even pushing Uniswap into the top 10 of the entire crypto industry.

By early Friday, the value had grown to $5.4 billion, according to Token Terminal, a digital-asset market data website.

token-terminal-ranking
Uniswap is already the biggest decentralized application by market value.
Source: Token Terminal

CoinDesk’s Muyao Shen described the early trading action as a “roller-coaster ride,” perhaps because nobody really had any idea what the tokens should be worth. But the token issuance represented a quick paper profit for big venture-capital investors like Andreesen Horowitz that had joined an $11 million funding round for the project just last month.

The capital event also cemented a comeback for Uniswap, which last week…

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