$1.1BN ETH Could Enter Market When Uniswap Farming Ends

Over seven weeks, the protocol distributed 583,333 UNI tokens weekly across four liquidity pools, pulling in more than $2.4 billion in deposits. That influx made Uniswap the largest decentralized exchange by total value locked. Keeping that capital will prove harder once rewards end.

Darryl Wang, an analyst at DeFiance Capital, shared the numbers on Twitter. Around $2.3 billion sits in Uniswap's pools right now, with roughly $1.1 billion of that in ETH. "On 17th Nov, $UNI farming will end. Right now ~$2.3bn funds are deployed farming UNI, with $ETH being the reference token. This means that there is currently ~$1.1bn ETH locked up, about to be released into the wild. Where do you think that ETH will go?" he wrote.

Wang expects most of that capital to leave. He put the departing liquidity at around $500 million in ETH and another $500 million split between WBTC and stablecoins. When Uniswap first launched farming, ETH gained 7 percent. Traders had loaded up on ether to chase the UNI rewards. Now Wang and others wonder whether those same traders will sell their ETH holdings as the incentives dry up.

The reduction in new UNI tokens could support prices over time. But markets face immediate risk. Uniswap held a community call this week to address these concerns. Monet Supply hosted the session. Matteo Liebowitz, the protocol's head of strategy, participated alongside crypto podcaster Matt Aaron and 0xMaki from SushiSwap. The group left without any decisions. No one proposed extending the farming program or launching new pools to replace it. Heading into the next week, the community had no clear direction, and traders braced for volatility.