On-chain activity under the microscope: Uniswap leads ETH/MKR market, difficulty bomb dampens Ethereum issuance


Uniswap becomes dominant market for ETH/MKR

Uniswap, the Ethereum automated exchange protocol, is now the number one trading venue for the ETH/MKR pair, with over $329,000 in volume over the last 24 hours. Ethfinex and OKEx follow closely behind with $257,000 and $228,000 respectively. Uniswap’s success may be partially driven by the temporary closure of OasisDex, the MakerDAO project’s native exchange.

Source: https://beta.uniswap.info

At present there is 1258.17 MKR and 5616.33 ETH in the MKR liquidity pool, with a combined USD value of approximately $1,300,000. Over 2,000 ETH and 474 MKR were added to the pool on Feb. 11 alone, representing a 110 percent increase in liquidity.

Source: https://www.coingecko.com/en/coins/maker

Interestingly, despite the outsize volume, there remains a 6.88 percent price discrepancy between the MKR/ETH price on Uniswap and that on competing exchanges. Uniswap currently prices MKR at $496.08, whereas Ethfinex, OKex, and Kyber Network price MKR at $529.84, $530.19, and $532.42. Over time we should expect arbitrageurs to close this spread, buying up MKR on Uniswap and selling on Ethfinex until the prices start to converge.

In other MakerDAO related news: following a successful proposal, the stability fee has been raised from 0.5 percent/year to 1 percent/year.

Source: https://vote.makerdao.com

In a blog post announcing the interest rate increase, the MakerDAO team cited high Dai inventory and a failure to maintain the $1 peg as primary reasons for the change. Increasing the stability fee should incentivize CDP owners to wipe their debt, helping Dai return to its peg by decreasing circulating supply.

Ethereum block times up, daily issuance down

Ethereum’s average block time and daily issuance continue to rise and fall, respectively, as the Ice Age creeps in and increases difficulty. Block times on Feb. 12 averaged at 20.12 seconds, while issuance was 12,189 ETH. The difficulty bomb effect increases by a factor of two every 100,000 blocks.

Source: etherscan.io

The Ice Age will be pushed back through the upcoming Constantinople upgrade, which is expected to arrive later this month. As a result, block times should return back to roughly 14 seconds. However, due to the reduction in block rewards from 3 ETH to 2 ETH per block proposed in EIP-1234, daily issuance will actually stay roughly consistent with current levels.

Augur open interest falls after Midterm market resolution

Open interest on Augur fell 38 percent between Feb. 2 and Feb. 3 as the infamous House Representatives Midterm market finally resolved, with the outcome ultimately favouring ‘Democrats’. It’s estimated that participants who staked REP in favour of the ‘Republicans’ outcome lost ~$5,860 in REP.

Source: https://mikemcdonald.github.io/eth-defi/

Bonus: an interview with Joe Midterms, a pseudonymous trader who used Augur to bet half a million dollars worth of Ether that the Republicans would hold the House.

At present, there is over $825,000 in open interest across all Augur markets. The largest market by money staked is “Will Donald Trump be Re-Elected in 2020?”, with users currently predicting a 40 percent chance of the President retaining his job.

WBTC daily transaction count wavers

WrappedBTC (WBTC), the ERC20 implementation of Bitcoin, launched on Jan. 30. There is currently 72.4214 WBTC in circulation, valued at just over $260,000. According to Etherscan, there are currently just 205 addresses holding WBTC.

Since WBTC’s launch, daily transaction count has floundered, with just 28 transactions on Feb. 12.


Source: etherscan.io

If you consider WBTC to be a store of value then the lack of transaction activity makes sense: owners are looking to hold over the medium-long term, benefiting from any price appreciation. However, given that WBTC was marketed as a means for BTC to interact with Ethereum’s Open Finance applications, the lack of transaction activity to date may fall short of expectations.

January sees all time high Truffle downloads

Truffle, the ConsenSys led Ethereum development framework, saw an all time high 115,890 downloads in January, while downloads are up 9 percent over the last three months. 

Source: https://truffleframework.com/dashboard

The post On-chain activity under the microscope: Uniswap leads ETH/MKR market, difficulty bomb dampens Ethereum issuance appeared first on The Block.

On-chain activity under the microscope: Uniswap leads ETH/MKR market, difficulty bomb dampens Ethereum issuance written by Matteo Leibowitz @ https://www.theblockcrypto.com/2019/02/14/on-chain-activity-under-the-microscope-uniswap-leads-eth-mkr-market-difficulty-bomb-dampens-ethereum-issuance/ February 14, 2019 Matteo Leibowitz

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