{"id":174948,"date":"2020-10-31T04:00:38","date_gmt":"2020-10-31T04:00:38","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=174948"},"modified":"2020-11-12T21:56:29","modified_gmt":"2020-11-12T21:56:29","slug":"top-crypto-fund-manager-explains-the-bull-case-for-uniswap-uni","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/top-crypto-fund-manager-explains-the-bull-case-for-uniswap-uni\/","title":{"rendered":"Top crypto fund manager explains the bull case for Uniswap (UNI)"},"content":{"rendered":"

It's been a bloody past few weeks for the DeFi market. Most coins pertaining to this space have dropped over 70 percent from their all-time highs set in August or September. Yearn.finance<\/a> (YFI), for one, recently dropped back into the four-digit region after peaking at $44,000 two months ago.<\/p>\n

Uniswap (UNI) is another DeFi coin that has faced a steep drawdown. From its all-time high of $8.40, the coin has declined by over 72 percent. It now trades for $2.30<\/a>, which still gives the protocol a fully diluted valuation of just over $2.5 billion.<\/p>\n

A prominent crypto asset fund manager, who left Wall Street to pursue Bitcoin, recently explained that UNI remains cheap on a macro basis.<\/p>\n

Top Ethereum coin Uniswap remains cheap: Arca CIO<\/h2>\n

According to the CIO of Arca, Jeff Dorman, Uniswap's UNI still has a booming bull case despite the strong decline in DeFi, from the space's offered yields to trading volume.<\/p>\n

He first asserted that Uniswap remains the uncontested leader in decentralized exchanges:<\/p>\n

“Uniswap is the clear market leader in DEX trading. Like “ETH vs smart contract protocols”, there's not even a close second to $UNI in DEX Trading.”<\/p><\/blockquote>\n

This is important as Uniswap will soon integrate a model where UNI holders will obtain a portion of the trading fees generated by the platform:<\/p>\n

“Expected annual earnings for Uniswap: $380mm (based on $360mm avg daily trade volume @ 0.30% fee).<\/span><\/p>\n

-> $66mm distributed to <\/span>$UNI<\/a><\/span> token holders after the fee switch (1\/6th of fees) -> 13% divd yield -> 1.30x Price\/Sales -> 7.5x Price to distributed CFs. <\/span><\/p>\n

That's really cheap!”<\/span><\/p><\/blockquote>\n

As he explains, relative to other DeFi coins and even traditional financial service providers, the dividends offered for UNI holders make current valuations extremely “cheap.”<\/p>\n

For comparison, the S&P 500 has an aggregate dividend yield of 1.7 percent and a 25 times forward price-to-earnings ratio, numbers far more expensive than Uniswap is in its current state.<\/p>\n

Explaining the significance of these metrics, Dorman stated:<\/p>\n

“As soon as market participants start giving $UNI the same benefit of the doubt that they give $ETH in terms of future value accrual, $UNI will be viewed as the single cheapest asset in all of digital assets and certainly all of #DeFi.”<\/p><\/blockquote>\n

\n

A thread on Uniswap $UNI<\/a><\/p>\n

The rationale for owning $ETH<\/a> as an investment is that Ethereum is a clear market leader, w\/ strong growth\/usage, & tangible fee generation even though none of this value accrues to ETH token holders yet.<\/p>\n

This is actually the same bull case for $UNI<\/a> ?<\/p>\n

— Jeff Dorman, CFA (@jdorman81) October 30, 2020<\/a><\/p><\/blockquote>\n