Bitcoin and Ethereum have had a strong start to 2024, with both coins up more than 50% since January. However, these are not the best indicators in the industry: the Uniswap token – UNI – has increased in price by 70%.

Income distribution

The main reason for the sharp jump in UNI's price was management's proposal to modernize revenue distribution. Its purpose is to encourage holders to hold tokens for a long time. To this end, it is proposed to reward those who use UNI in staking or delegate it.

By words Head of the Uniswap Foundation Erin Koen, the reward system will also be transferred to commissions. This will further motivate users for long-term cooperation and lead the protocol to success.

However, reforming the reward system was not the only catalyst for the rise in UNI's price. A number of updates were also proposed and implemented.

Uniswap V4

The draft code for the Uniswap V4 update appeared back in June 2023. After this, testing and optimization began. And finally, the Uniswap Foundation, which is behind the development of the protocol, announcedthat the update will be implemented in the third quarter of 2024.

The timing for the announcement was not chosen by chance, as Uniswap itself emphasized. The timing was determined after the release date of the Dencum update on the Ethereum mainnet became known, which is scheduled for March 2024.

The basis of this update should be the new concept of “hooks”. As planned, it will implement custom logic into specially designated segments of pools, exchanges, commissions and other positions of liquidity providers (LPs). Hooks will also allow for dynamic adjustments and provide more opportunities for the use of smart contracts.

According to management, the main objective of introducing this concept is to reduce fees and improve asset management for end users.

In total, the implementation of Uniswap V4 includes three phases:

  • code freeze (what is currently happening);

  • audit and testnet: includes comprehensive audits by both third parties and developers, as well as deployment to the testnet to carry out final transformations;

  • implementation on the Ethereum main network.

Native Wallet Extension

About the introduction of a new web extension for its native Uniswap wallet announced on social network X February 27:

“With the Uniswap extension, you will be able to exchange, send and receive cryptocurrency, and sign transactions anywhere on the network. Everything is right here in the sidebar – exactly where it should be. It's like magic.”

To take advantage of the new functionality, users will have to stock up on a fair amount of patience. You will first need to request a specific username via uni.eth name. The wait can be up to six weeks.

Implementation of limit orders

Uniswap has introduced limit orders that allow its customers to transact automatically when UNI reaches a certain price. The innovation will allow traders to optimize their workflow by reducing the time they spend monitoring price fluctuations. By the way, what about them?

Technical analysis

Overall, 2024 is going quite well for UNI so far. At the end of 2023, the token was trading at a price of about $7.2, but now it is almost $12.5, and at some point even reached $13.5. For the first 23 days of January, this was unthinkable—during this period, the token lost almost 23%. However, then everything turned upside down.

In a month and a half, UNI more than doubled in price. 80% occurred in the last week of February. It was then that the main statements about the upcoming updates to Uniswap were made. Recent successes have allowed UNI to gain a foothold in the top twenty in terms of market capitalization. As of March 2, 2024, the token ranks 18th.

From a technical analysis point of view, UNI is in bullish territory, near the $12.5 resistance level. If you manage to gain a foothold above it, the road to $20 will be open. If not, then a rollback to the support level of $9.75 is possible.

The bulls should be given additional confidence by the fact that the price is above the 50-week moving average (indicated in blue). The RSI indicator is in the overbought zone. True, this often happens in a bull market, and its signals should be considered in conjunction with other sources.

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Source: tradingview.com

Conclusion

The updates announced by Uniswap management gave investors confidence. Over the week, the token has gained more than Bitcoin and Ethereum since the beginning of the year. Further growth will depend on the success of innovations and on what else the site can offer to its customers.

This material and the information contained herein do not constitute individual or other investment advice. The editors' opinions may not coincide with the opinions of the author, analytical portals and experts.