From Robinhood Chain to Arc, the growth dividends brought by new chain traffic are becoming an important driving force for Uniswap's recent growth.

Written by: Nancy, PANews

The Arc mainnet kicked off with a bang on its first day, capturing much market attention but struggling to escape a "one-day tour" market. In this brief on-chain carnival, Uniswap captured the traffic and emerged as the winner.

From Robinhood Chain to Arc, the growth dividends brought by new chain traffic are becoming an important driving force for Uniswap's recent growth. At the same time, v4 is accelerating to catch up with v3, gradually becoming a significant force in Uniswap’s expansion of its liquidity landscape.

Capitalizing on Robinhood Chain dividends, Uniswap next seizes Arc traffic

Over the past month, UNI experienced a strong market rally, with a cumulative increase of 108.9%, rising from $3.2 to $6.9. Even with the recent overall pullback in the cryptocurrency market, UNI continued to rise against the trend. Behind the sustained increase in prices, in addition to the warming market sentiment, Uniswap’s steadily growing trading volume and protocol revenue have become significant fundamental support.

Data from DeFiLlama shows that over the past month, Uniswap has processed a cumulative trading volume exceeding $79.5 billion, surpassing the total trading volume of PancakeSwap, PumpSwap, and Aerodrome combined during the same period. In just the past 24 hours, Uniswap's trading volume also approached $3.86 billion, which is several times that of the second place, PancakeSwap.

The continuous growth in trading volume has directly led to an increase in Uniswap's protocol revenue. DeFiLlama data indicates that Uniswap's protocol revenue reached $23.15 million in the past quarter, while in the past 30 days it reached $5.26 million, ranking first in DEX revenue.

Currently, Robinhood Chain has become the main contributor to Uniswap's recent revenue growth. For example, September data shows that this month Robinhood Chain contributed approximately $6.48 million in protocol revenue to Uniswap, accounting for 65.5% of total revenue during the same period. Although with the cooling of meme trading frenzy and the withdrawal of some high-fee pools, the income brought by Robinhood Chain has declined from its previous peak, Uniswap's overall protocol revenue has not noticeably dropped.

Since the fee switch on Robinhood Chain was activated at the end of July, the scale of UNI burn has significantly accelerated. Data from Dune indicates that in less than two months, the amount of UNI burned contributed by Robinhood Chain has accounted for 19.3% of the total burn volume. Looking at daily data, this proportion is even higher; on September 17th, the amount of UNI burned from Robinhood Chain accounted for half of the total burn on that day, significantly exceeding other networks such as Ethereum and Base.

With liquidity and user base from the leading DEX, Uniswap has also become a preferred partner for new chains competing for traffic. On the first day of the Arc mainnet launch, Uniswap announced its comprehensive integration with Arc and became its preferred DEX. As trading enthusiasm surged rapidly after Arc's launch, Uniswap gained a new channel for trading traffic.

Data from Dune shows that on September 16th, Uniswap's trading volume on Arc exceeded $410 million. In comparison, the trading volume for Uniswap on Robinhood Chain's mainnet launch day was approximately $70.5 million. Looking at the trading volume on the first day of mainnet launch, the traffic brought to Uniswap by Arc is significantly higher than that of Robinhood Chain. However, this round of trading frenzy on Arc mainly brings incremental traffic to Uniswap, as the fee switch on Uniswap has not yet been activated on Arc, meaning this portion of trading volume cannot currently be converted into UNI burn.

Meanwhile, with the substantial pullback of the Arc ecological tokens, on-chain liquidity has also seen a decrease, leaving uncertainty as to whether the short-term trading enthusiasm can continue. For Uniswap, whether Arc can further transform from a short-term traffic entry into stable trading volume and sustained revenue like Robinhood Chain still needs to be validated by future market performance.

New chain traffic boosts V4 growth, hook mechanism exposed to malicious risks

Uniswap has returned to the center of on-chain liquidity competition, with V4's rise becoming an undeniable driving force. Among them, Hook, as one of V4’s core innovative mechanisms, is gradually becoming an important growth point for Uniswap.

Data from Blockworks shows that Uniswap v4 is continuously narrowing the trading volume gap with v3, with the latest weekly trading volume share rising to 48%, approaching v3's 52%. In terms of fee revenue, v4's weekly fee revenue share has also increased from 8% at the end of July to 25%, while v3's share dropped from 87% to 67% during the same period.

The penetration speed of V4 on new chains is noteworthy. On Robinhood Chain, v4's weekly trading volume share has reached 42%; on Base, this proportion is 11%, while Arbitrum and Optimism are both at 18%. Even for the newly launched Arc, v4’s daily trading volume contribution share has reached 29.7%.

In addition to continuously increasing market share, the trading asset structure of v4 is also changing. In July, v4's trading was mainly focused on meme coins, stablecoins, and L1, L2 tokens; by August, stablecoins, tokenized assets, and meme coins became the predominant trading types, with the trading share of meme coins slightly declining from the previous month. Stablecoins are able to maintain a significant position in v4 trading due to the underlying execution efficiency and fee design that better suit stablecoin trading needs.

As the v4 version expands rapidly, Hook (the mechanism) trading is also accelerating. Data from Blockworks indicates that currently, most trading activities in v4 still come from ordinary liquidity pools, but Hook-related trading has been continuously climbing since August, currently accounting for 44%, whereas it was previously in single digits.

Hook allows developers to customize dynamic fees, token issuance mechanisms, RWA, and permission pools for liquidity pools based on different assets and trading scenarios. Compared to the relatively fixed fee configurations of v3, v4 offers a more flexible trading mechanism that allows liquidity pools to be tailored to specific scenarios.

Robinhood Chain is an example. As a Layer 2 platform focusing on tokenized stocks and other assets, its cumulative trading volumes for Uniswap v3 and v4 have reached $24.3 billion and $23.35 billion, respectively, coming very close in scale. In the latest weekly trading volume, v3 accounted for 58%, while v4 reached 42%, showing that the gap between the two has been narrowing since the initial launch. This also indicates that the growth of v4 is not solely due to trading migration brought by version iteration, but also related to the emergence of new chains, new assets, and customized trading demands. With more assets and trading scenarios entering the chain, the Hook mechanism will also expand Uniswap's liquidity scenarios.

However, with the expanding application scale of v4 and Hook, related security risks have begun to receive attention. The 0x protocol recently published an article stating that it has observed a significant increase in malicious Uniswap v4 Hooks. Such Hooks may present favorable prices during the quote request stage but change the actual execution price at the time of transaction settlement, misleading aggregators, wallets, and trading applications, ultimately harming user interests.

0x stated that it has routed 81.92 million transactions this year, with a total transaction volume of $42.67 billion, of which about 70% of the transactions involve Uniswap liquidity. The protocol conducted static analysis, dynamic analysis, and transaction data observation on 84,163 Hooks across six chains, and based on this, determined that only 19.4% qualify as safe Hooks, 54.2% are categorized as malicious, and another 26.4% may exhibit malicious behavior.

The protocol also pointed out that some malicious Hooks can differentiate between quote requests and real trading scenarios by detecting the Ethereum Virtual Machine (EVM) environment or adopting random fee strategies. This means that the price users see during the quote stage may not necessarily be honored at settlement, with the actual asset value possibly being up to 50% lower than the quoted price. In response to this issue, 0x stated it has implemented advanced detection and liquidity pool reviews to prevent related pools from entering its routing system and reminds routers, applications, and users to pay attention to whether the quotes match the actual execution results.

In response, Uniswap founder Hayden Adams stated that the so-called "routing to bad Hooks" issue falls under technical mishandling and the team can seek assistance to resolve it. He also emphasized that Uniswap v4 Hooks have released a lot of innovative potential and recommended that developers use the Uniswap API. He explained that the Uniswap API supports obtaining the best market prices, avoiding malicious Hooks, and accessing Uniswap's full liquidity without incurring additional routing fees. Furthermore, the API also supports cross-chain exchange and integrates external liquidity through aggregator Hooks, further expanding into a complete aggregator.

From the increase in v4 trading share to the continued growth of Hook trading share, Uniswap is expanding into new chain and new asset markets through more flexible liquidity mechanisms. However, as customized features become increasingly rich and asset boundaries continue to expand, balancing innovation and security will also be a problem that Uniswap needs to address.