Uniswap’s Move to the Top of the Stack

The Uniswap mobile launch represents a protocol positioning shift. Putting their product into smartphones now disrupts the natural order of the defi tech stack.

Previously I have written how liquidity “primitives” like Uniswap don’t attempt to have a direct relationship with the customer. They are deep in the DeFi stack. Their primary goal is simply to aggregate as much liquidity as possible such that the entities at the top of the stack, such as aggregators, are forced to route user interactions through this liquidity.

While other DeFi primitives like Curve Finance and AAVE have continued to focus primarily on liquidity-maximization, Uniswap appears to have undergone a shift. With the release of the Uniswap mobile app, they are going after direct relationships with consumers. Users can generate key pairs from scratch on the app, perform ERC-20 swaps, and even buy a select few tokens with fiat from their bank account or credit card.

With the mobile app, Uniswap has effectively disintermediated all aggregators like 1inch. Heck, I can’t think of any position closer to the customer than their mobile phones. I consider it higher in the stack than aggregator apps (1inch), UI aggregators (Zapper), and even browser wallets (Metamask).

Note: the above examples are just a snapshot of the available protocols and products

Thoughts about the future:

  • Will this give Uniswap more strategic power? Certainly in theory, though it remains to be seen in practice. I wish I had access to some early results: how much of Uniswap’s recent rise is users is referred through the mobile app? Or is it merely due to the recent memecoin season?

  • As far as I know, the fees for swapping through the mobile app are the same as directly through the smart contract. But it’s not out of the question to add on a small affiliate fee at some point. If this is done, would it go to the Uniswap protocol or Uniswap Labs?

  • This move puts Uniswap into much more direct competition with Coinbase as users can buy crypto with fiat.

  • On a related note, to truly compete with Coinbase, the ideal case would be Uniswap allowing purchases of things outside the Ethereum ecosystem, such as Bitcoin. Might I suggest incorporating Thorchain under the hood?

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