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🟢 Prices Pumping & TradFi Entering the Space

Gm fellow Architects;

A lot has happened in a week. Uniswap - the largest DEX - is launching a new version, making it more competitive against CEXs. Prices are pumping, and traditional financial institutions are coming left and right for crypto products. Buckle up.

In this week’s installment:
• Uniswap surpasses Coinbase in transactions
• Bitcoin and Ethereum reach their highest levels in 2023
• TradFi wants in on crypto

Move over centralized exchanges. It's time for DEXs

In the past 12 months, Uniswap has generated a staggering $555 million in rewards for users who contributed assets to its liquidity pools. These rewards play a crucial role in enabling token swaps for the Web3 community.

The upcoming release of Uniswap v4 is highly anticipated, promising even more groundbreaking features and advancements.

And what's Uniswap again?

Uniswap (launched in 2018) is a Decentralized Exchange (DEX) that enables cryptocurrency trading through liquidity pools.

These pools consist of crypto assets contributed by users, who are duly rewarded for their participation. The availability of these assets ensures continuous liquidity for trading, regardless of order size or the presence of a counterparty.

The Uniswap protocol levies a small fee on each transaction (swap) and distributes it among the liquidity providers within the pool, fostering a mutually beneficial relationship.

The Governance of Uniswap is in the hands of UNI token holders, who can vote on proposals regarding governance, revenue distribution, fee structures, and more.

Uniswap is currently operating on its third protocol version (Uniswap v3), introduced in 2021 with numerous innovations (such as concentrated liquidity ranges), propelling Uniswap to become the most widely adopted DEX protocol.

Cool, show me the numbers

In the past 24 hours, Uniswap facilitated trades worth approximately USD 2 billion, consistently surpassing Coinbase, the largest U.S. centralized crypto exchange, in monthly traded volume for several consecutive months.

According to Dune Analytics, Uniswap commands roughly 60% of the total on-chain trading volume, surpassing the trading volume of its closest DEX competitor by over threefold.

And over the past 12 months, Uniswap has distributed fees exceeding USD 555 million to liquidity pool providers, solidifying its position as the leading utility protocol within the Web3 ecosystem.

Wow, that's a lot. Tell me more about the upcoming release

The recently announced Uniswap v4 has generated significant excitement due to its introduction of innovative features, including:

  • Hooks: They allow for enhanced customization of liquidity pool behavior. Hooks enable adding logic to pool interactions, enabling actions such as automated asset purchases or sales based on predefined price thresholds.
  • Singleton: A single smart contract capable of encompassing all different pools within Uniswap v4. Unlike the previous version, where each pool had its isolated contract, singleton significantly reduces gas costs by consolidating complex swaps through a single contract, potentially reducing deployment expenses by up to 99%.

In plain English, please

These proposed innovations aim to enhance the accessibility and cost-effectiveness of v4 liquidity compared to the current v3 version.

By doing so, Uniswap aims to enhance its competitiveness against centralized exchanges, expand its trading offerings to more exotic pairs, and capture a larger share of order flow from DEX aggregators.

I want in

Well, that's what we are here for. At Arch, we use a robust methodology, and our team of professionals analyzes the market for you.

Our investable products follow the Arch Token Classification Standard (ATCS), which gives us a comprehensive view of project sectors and token types, which in turn helps our investors get the best products in the space.

Uniswap holds a prominent position within the Web3 ecosystem and is a vital component of the Arch Ethereum Web3 token ($WEB3), accounting for approximately 20% of its allocation.

Bitcoin and Ethereum reach their highest levels in 2023

Source: Arch Intelligence

Following a turbulent start to June, dominated by U.S. regulatory news, the past two weeks have brought encouraging developments for long-term industry adoption in the crypto world.

Notably, BlackRock, the world's largest asset management firm, surprised the market by filing forms with the SEC for a Bitcoin exchange-traded fund (ETF), despite previous rulings against such initiatives. More on that below.

This bold move amidst a controversial period for crypto had a highly positive impact on the market, with Bitcoin surging approximately 20% from $25,000 to $30,000 levels. Ethereum also gained traction, returning to around $1,900, bringing both assets to their highest trading levels in 2023.

In the realm of Arch products, our Arch Blockchains ($CHAIN) - which encompass major existing blockchain protocols - faced adversity in early June due to the inclusion of Solana (SOL) and Polygon (MATIC) in the SEC's list of non-registered securities.

However, as Bitcoin and Ethereum rebounded to their highest levels in 2023, $CHAIN experienced a recovery. In June, $CHAIN showed a positive performance of 3.4%, with a year-to-date gain of 62.1%.

Meanwhile, traditional financial markets continue to show strength in risk assets, with the S&P 500 recording a year-to-date performance of 14.1% and the Nasdaq Composite rising by 30.2%.

These positive trends persist despite a surprising (negative) announcement from the Federal Reserve, in which officials firmly stated their expectation for two additional 25 basis point hikes in U.S. interest rates by 2023.

The TradFi and crypto crossover we didn't have on our Bingo cards

In a notable shift, large traditional finance (TradFi) companies are entering the crypto space.

⏱ If you only have time for the quick and dirty

  • Crypto giants (ahem: Coinbase and Binance) got sued by the SEC
  • Blackrock filed for a Bitcoin ETF
  • Citadel, Charles Schwab, and Fidelity launched a new crypto exchange
  • Deutsche Bank is looking to offer crypto custody services
  • BTC and ETH prices pump. Investors feel bullish

☕️ If you want the full scoop

🔵 On what's happening with Coinbase and Binance: Binance announced it would shut down U.S. dollar deposits and plans to remove withdrawals, as the SEC has called on regulators to freeze its assets.

Coinbase, in turn, has been invited by Hong Kong legislator Johnny Ng to set up shop in Hong Kong.

⚫ On Blackrock and asset managers in general: Let's say it's a lot. BlackRock - with a staggering $10 trillion in AUM - has filed for a Bitcoin ETF. Deutsche Bank is seeking a license for crypto custody services.

Invesco and WisdomTree have also filed for Bitcoin ETFs. Rumors abound that Fidelity, another finance heavyweight, may soon apply for its own Bitcoin ETF. ️

🔁 On the TradFi crypto collab: TradFi giants Citadel, Charles Schwab, and Fidelity have joined forces to launch EDX Markets, a new crypto platform that operates like a stock exchange.

While it won't hold users' crypto, it will serve as the hub for agreed-upon prices, targeting institutional investors rather than casual traders. The platform's initial offering focuses on Bitcoin, Ether, Litecoin, and Bitcoin Cash.

📊 On if all of this is good or bad for crypto: It depends on who you ask. But one thing is for sure: It's great for mass adoption.

💸 On prices (because it all comes down to prices): It's a sea of green. Bitcoin (BTC) is pumping, and Ether (ETH) is up. Litecoin (LTC) and Bitcoin Cash (BCH) are also on an upward trend after getting the EDX Markets seal of approval. According to the crypto fear and greed index, markets are currently in greed.

🗞 In other news

📈 So, how can Arch products fit into my portfolio?

Easy, book a call to learn how our investment products can fit into your portfolio. Schedule a meeting with Nicolas Jaramillo, our Co-Founder, who can answer any questions you may have.

Book a time that works for you using our scheduling link.

Disclaimer: The opinions expressed are for general informational purposes only and are not intended to provide specific advice or recommendations. The views reflected in the commentary are subject to change without notice