Research Summary
The article provides an in-depth analysis of the trading activities on Uniswap’s ETH/USDC pools. The author scrutinized all Uniswap V3 trades, including gas, and calculated a markout using different time horizons of the Binance last traded price to measure profitability. The analysis revealed that the top 1,000 swappers made over $200M in net PnL after gas, while the worst ~100,000 swappers accounted for nearly all of the $350M in losses. The most successful trader on Uniswap netted around $10M in 1m Binance markouts net of gas and fees.
Actionable Insights
- Monitor Trading Patterns: The top 1,000 traders typically net a few hundred dollars per trade after gas. They are not paying much in gas to pick the LPs off, suggesting that the trade isn’t that expensive latency-wise.
- Assess Trader Profiles: Among the top traders, there are two profiles. One type rotates wallets after a few months, while the other keeps trading in the same wallet. Understanding these profiles can provide insights into trading strategies.
- Stay Informed on Trading Size: The $175k- $2M size trades were the most toxic for LPs. The top 1,000 traders’ distribution of trade size is centered around this range.
