- A new report by Kaiko compared the market depth of Binance and Uniswap.
- The report found that Binance had over 4 times Uniswap’s liquidity at certain price levels for wETH/USDT.
- Uniswap came out ahead of all major centralized exchanges in the wETH-wBTC market in terms of liquidity.
On-chain analytics platform Kaiko recently published a report that took a deeper look at the liquidity on centralized crypto exchanges and decentralized exchange Uniswap V3. The report focused on liquidity distribution across prices and markets, in an effort to understand liquidity dynamics of centralized and decentralized crypto exchanges.
Kaiko analyzed market depth data from several crypto exchanges, including Kraken, Binance, Bybit, Bitstamp, Kucoin, and Deribit, among several others. Market depth is usually used to measure liquidity which is calculated across the order books of crypto pairs. A deeper market depth is usually indicative of higher liquidity, which, in turn, offers better slippage to crypto traders.
The report, compiled by Kaiko researcher Anastasia Melachrinos, compared the wETH/USDT pair on Binance and Uniswap V3, given that it is one of the most liquid trading pairs. It was found that Uniswap’s fee pool for the pair was less liquid than Binance’s across most price levels. Binance reportedly had over four times the liquidity of Uniswap at certain price levels.
“Uniswap V3’s liquidity distribution is surprisingly symmetrical, which suggests that the liquidity is spread widely enough to efficiently capture most, if not all, price variations, especially considering the high cost of adding or removing liquidity from Uniswap V3 liquidity pools,” Kaiko’s report stated.
While Uniswap V3 had less liquidity than Binance for the wETH/USDT pair, it came out ahead of all major centralized exchanges in the wETH-wBTC market. Its 0.3% and 0.5% fee pools for this pair offered 6 and 3 times more liquidity, respectively. However, for smaller crypto tokens like Curve DAO Token (CRV), Uniswap appeared to have less liquidity than the top five most liquid centralized exchanges that offered the CRV/wETH pair.
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