Uniswap’s Two Sided Bet

Last week was rough, to say the least, with a heavy sell-off in AI names after the CPI print came in higher than expected. With the exception of the Modular index, which got a boost from the rally in TIA, every other benchmark we track ended the week in the red, with most indices down over 10%.

But I am of the opinion that the structural bull market in BTC remains intact. I love times like these when the market is fearful, as it gives me the opportunity to accumulate tokens I like while the bull market continues to take shape.

Don’t take my word for it. One of my favourite macro research teams to follow, The Kobeissi Letter, outlined in an excellent piece why they remain bullish, with the S&P 500 just 2% away from its all-time high despite the many bearish headwinds.

One of the tokens that made the top of my list to buy during the dip was Uniswap, which is down over 30% from its recent highs following the cooldown in the Robinhood ecosystem. After five consecutive weeks of declining revenue, Uniswap broke the trend last week. Based on the last 30 days, annualized UNI burns now sit at $92M.

Yes, the first thing most people would say is that based on these numbers, UNI is trading at a 50x market cap to revenue multiple, which looks expensive compared with other DEXs and revenue-generating protocols in the space. But I think this premium is warranted for a few reasons.

Just a month ago, we got a major tailwind for tokenized assets through the SEC’s Innovation Exemption, which is paving the way for tokenized US stocks to trade through AMMs and liquidity pools. While this will of course benefit issuers such as Backpack and Securitize, which are tokenizing these equities and bringing them onchain, a lot of the value captured will fall to the trading layer where these assets trade.

Here, Uniswap has been dominating and remains the top destination for tokenized equity trading, although Aerodrome is fast on its heels.

Uniswap did $730M in volume last week, and these are still early days for how large the onchain tokenized equity market could become. One edge Uniswap has is the customization it can offer firms through v4 hooks.

Earlier in July, it introduced Permissioned Pools with partners including Superstate and Securitize. In early October, SMBC and Nethermind announced that they would be building an onchain trading venue for Japanese investors on Uniswap v4, designed around Japan’s regulatory requirements.

The venue is targeted to roll out in mid-2027, but the thesis is clear. Tokenized assets are coming onchain, and institutional investors are likely to choose platforms that can be tailored to their requirements while also having a long-standing history and reputation, such as Uniswap.

So the institutional side is covered, but what about the retail side and its love for speculation and memecoins? A lot of that activity on Robinhood has cooled from its highs, with tokens such as PONS, AI and many others down over 50%. Sentiment around the Robinhood ecosystem is near its lows, but I think this may be changing soon.

There are rumours that Robinhood will be rolling out a grant worth nine figures alongside a builder program. Given that Robinhood has now had a taste of how lucrative this activity can be, I am not surprised that it may throw incentives at the ecosystem to spark another wave, hopefully one that is more sustainable.

If so, even without knowing who these incentives will be rolled out to, Uniswap is a likely winner given the number of applications and launchpads built on top of Uniswap within Robinhood’s ecosystem. The way I think about it, with sentiment this low, we could be one Robinhood listing for a token like PONS or AI away from kicking off another wave.

I broke down the full thesis on why I am bullish on Uniswap in a prior report, and if you haven’t read it yet, do check it out. UNI is a comfortable hold for me this cycle, with long-term upside coming from institutions and tokenized assets moving onchain, alongside the added short-term upside of another memecoin season on Robinhood.

— Kunal

Activity on Near Intents continues to remain strong with $875M in swap volume processed last week and $317K of NEAR tokens bought back using intents revenue.