In decentralized finance (DeFi) and buying and selling, Uniswap has lengthy reigned as a dominant power. Nonetheless, a current evaluation by Lark Davis, a Bitcoin (BTC) investor, appears to counsel Dealer Joe, a decentralized alternate (DEX) on Avalanche–a extremely scalable blockchain and Ethereum’s competitor, may ultimately emerge as a formidable competitor, even overtaking Uniswap.
Is Dealer Joe Undervalued Relative To Uniswap?
In a put up on X on December 12, Davis noted a discrepancy within the relative valuation between JOE and UNI, which function governance tokens of Uniswap and Dealer Joe. Particularly, the buyers famous that Dealer Joe’s handles round $300 million day by day buying and selling quantity on Avalanche alone.
Alternatively, Uniswap processes roughly $1.6 billion in day by day quantity throughout the Ethereum mainnet and Arbitrum, the most important layer-2 platform by whole worth locked (TVL) by Ethereum.
Davis additional famous that regardless of this “small” distinction in buying and selling quantity, Dealer Joe’s has a market capitalization of solely $238 million. In the meantime, Uniswap has a market cap of $3.6 billion, in accordance with CoinMarketCap data.
Even with comparatively slender common buying and selling quantity, the massive distinction in market capitalization means that JOE is considerably undervalued relative to UNI. Accordingly, this hole will possible be narrowed sooner or later, with JOE appreciating versus UNI, probably benefiting holders.
JOE Yields Versus UNI’s Governance: Which Token Has An Edge?
Davis additionally identified JOE’s potential, saying the token rewards holders with USDC yields. That is completely different from UNI, the place holders can vote on proposals and nothing else. Within the investor’s preview, apart from the undervaluation, this function may additional improve JOE’s enchantment, even contributing to its upside potential.
Because the crypto market recovers, Avalanche may additionally current further benefits to merchants and, due to this fact, Dealer Joe. The fashionable blockchain is scalable and has comparatively low charges no matter community exercise. With crypto costs increasing, Ethereum fuel charges have been rising in tandem, discouraging mainnet transfers. This has rerouted exercise to layer-2s like Arbitrum and competing platforms, together with Avalanche.
When writing on December 12, DeFiLlama data reveals that Dealer Joe has a TVL of $149 million, of which most property are tied to Avalanche. Solely $1 million is on Ethereum. JOE has been on an uptrend, rising 170% from October 2023 lows. The token is cooling off, taking a look at value motion on the day by day chart.
Characteristic picture from Canva, chart from TradingView
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