UNI vs Platform Tokens: Who Is the Best Captor of Trading Value?
TechFlow Selected TechFlow Selected
UNI vs Platform Tokens: Who Is the Best Captor of Trading Value?
"Platform tokens may not necessarily make you rich, but at least they won't cause you to lose money or go bankrupt."
Navigating Web3 tides with focused insightsSince Uniswap announced its governance token on September 17, controversy surrounding UNI has never ceased.
Uniswap airdropped 150 million UNI tokens—worth over 1 billion yuan at market price—to nearly 50,000 addresses that had previously interacted with Uniswap V1 or V2 contracts, an event hailed as a "legendary moment in cryptocurrency history."
Amid such acclaim, UNI surged 125% within just two days. Supporters argue that UNI is one of the rare productive assets in crypto, calling it the "next BNB" or even the "next Bitcoin."
Others say UNI is the deepest trap, burying the most people.
With a total market cap of 3.5 billion yuan, “how many years would it take to break even via dividends—assuming it even had dividend rights? Instead, it relies on vague governance rights to deceive?” said blogger “Biquan Zuoshou Lanqi.”
There's no definitive answer, but if we place Uniswap within the competitive landscape of the top three exchanges, what kind of position does UNI hold?
UNI vs. Exchange Tokens: Which Is Superior?
According to the exchange token equation published by Multicoin Capital: Exchange Token Network Value = Value Generated by the Exchange × Efficiency of Capturing Token Value.
Metrics for evaluating “value created by the exchange” include: revenue, daily users, website traffic, breadth of product offerings, community credibility, volume, liquidity, and management team capability.
Efficiency of value capture refers to the ability of the token price to rise alongside the exchange’s market share growth. Examples include buybacks and burns, cash flows, staking yield, trading discounts, voting rights, burn-to-price ratio, and inflation-to-distribution ratio.
By this formula, UNI clearly holds no advantage. In both value creation and efficiency of value capture, UNI today cannot compare with platform tokens from leading centralized exchanges.
Over the past two years, Uniswap has processed over $20 billion in trading volume and attracted more than 250,000 unique addresses. In contrast, top-tier exchanges can achieve daily trading volumes exceeding $1 billion, and Binance already had 9 million users by the end of 2018.
Nevertheless, UNI has several advantages:
-
UNI is one of the few productive assets in the crypto space.
-
High efficiency and low cost. The Uniswap team consists of fewer than 20 people and requires almost no server costs, whereas major exchanges employ hundreds or thousands with significant maintenance and operational expenses.
-
Holders of exchange tokens have no say in the development of the token economy, while UNI holders can participate in governance.
At the same time, there are six underlying risks behind UNI:
-
Uniswap imposes no listing barriers, resulting in widely varying token quality. Traditional exchanges selectively list tokens after rigorous quality screening. Additionally, Uniswap only supports ERC-20 tokens, while traditional exchanges support tokens from multiple blockchains.
-
Uniswap uses AMM (Automated Market Making), which generates trade prices but cannot discover market prices. This necessitates arbitrageurs to align AMM prices with external market prices. In other words, Uniswap cannot exist independently—it must rely on CEXs for price discovery.
-
Transactions on Uniswap require gas fees, which flow out of the system and go to Ethereum miners. In contrast, exchange token transactions typically incur no additional fees, forming a closed-loop system. For example, after UNI launched on September 17, Ethereum network gas prices spiked, briefly exceeding 700 Gwei.
-
Governance remains questionable. According to rules, proposing a governance motion requires 10 million UNI. OKEx Chief Researcher William stated: “Currently, UNI’s primary function is governance voting, but the top five addresses hold half of all tokens. For average users, governance voting is an illusory right, so UNI’s actual value remains very low.”
-
UNI is an inflationary token. After four years, its annual inflation rate will stabilize around 2%, while exchange tokens continuously deflate due to buybacks and burns.
-
Insufficient incentives for UNI holders.
OKEx allocates 30% of quarterly fees to repurchase OKB in secondary markets, Huobi commits 20% of quarterly revenues from Huobi Global and Huobi DM to HT buybacks, and BNB previously pledged to burn 20% of quarterly profits until BNB supply drops to 100 million—after which BNB burn ratios were no longer disclosed.
Besides price fluctuations, what tangible benefits do UNI holders receive?
Reportedly, Uniswap previously allocated its entire 0.3% transaction fee to liquidity providers (LPs). Now, 0.05% of each transaction fee goes to UNI holders, reducing LP rewards to 0.25%. Clearly, UNI offers little advantage in terms of revenue sharing.
As DeFi rapidly rises, DeFi tokens like LINK, YFI, LEND, and UNI have entered the top 100 or even top 10 by market cap—but none match UNI in scale.
UNI has generated louder hype and stronger momentum, perhaps because it represents a direct challenge to the apex of the crypto food chain: if UNI succeeds, the entire crypto landscape could be reshaped.
Unlike exchange tokens built on mature financial logic, part of UNI’s 15 billion yuan market cap stems from speculative expectations of potential value—indicating investor optimism toward its underlying sector, similar to how tech stocks receive premium valuations in traditional markets.
In contrast, the outlook for exchange tokens appears dim.
The Dilemma of Exchange Tokens?
From a value-capture perspective, compared to governance tokens of DEXs, centralized exchange tokens are built on solid financial logic. They offer practical utilities such as “fee discounts” and “IEO participation,” backed by real profits. Buybacks or dividends enable long-term appreciation, while continuous deflation further enhances their appeal.
However, objectively speaking, under the impact of DeFi, exchange tokens seem to be “on the decline,” lacking wealth effects and failing to attract investors.
Why have exchange tokens fallen into a pricing困境?
(1) Internal Contradiction
As mentioned above, most exchanges base their token appreciation logic on buybacks and burns to create deflation. However, this creates an internal conflict: exchanges earn most of their income in tokens, requiring them to sell tokens to realize profits—which pressures prices downward. Yet they also conduct buybacks or dividends, which may push prices upward. So, which force dominates?
In practice, exchanges tend to implement strategies that benefit themselves rather than investors. This reflects an inherent tension between exchanges and users.
(2) Increasingly Fragmented Holdings
During volatile market cycles, exchange tokens have gained popularity among investors due to their reputation for being “resilient to downturns,” “valuable,” and “long-term appreciating.” But this very popularity leads to increasingly fragmented token distribution.
Excessively dispersed holdings inevitably lead to conflicting trading behaviors among investors, resulting in exchange tokens oscillating within a narrow range without significant breakout movements.
Therefore, for a token’s price to rise sustainably, a concentrated force must lock up a certain percentage of supply to create artificial scarcity, pay higher prices to buy, and trigger FOMO-driven rallies.
As exchange token holdings become more fragmented, exchanges lose control over their own tokens—in other words, exchange token prices become increasingly market-driven.
(3) Severe Insider Trading
Due to information asymmetry, exchange tokens often become “cash machines” for exchange employees. With advance knowledge of upcoming positive news, insiders can strategically accumulate positions and dump them after announcements. Thus, it’s not surprising that many top exchange tokens experience sudden price dumps before利好 events fully materialize.
(4) Persistent Selling Pressure
Within exchange ecosystems, platform tokens serve not only as the exchange’s “face” but also fulfill financial functions—such as employee and executive compensation, including salary payments in tokens. This inevitably creates ongoing selling pressure that suppresses prices.
If another reason must be added, it is that as holdings become more dispersed, exchanges need to spend more to manipulate prices upward. Today, exchanges have less incentive to actively pump their tokens—the motivation now comes mostly from competitors’ strong performance and comparative KPIs.
“Why should we use exchange profits to pump prices and hand money to retail investors?” a senior executive at a top exchange once remarked.
When exchange tokens become too widely distributed and exchanges no longer actively drive price increases, are these increasingly market-driven tokens still worthy investment targets?
“My answer is yes—exchange tokens remain worthwhile for long-term investment,” said DeepTide analyst Li Feng. “In terms of development trends, centralized exchanges will continue to dominate trading in the long run, holding significant advantages in price discovery, matching efficiency, and comprehensive services. Their tokens are backed by real profits.”
As long as the exchange business grows, the fundamental value proposition of exchange tokens remains unchanged. Under continuous buyback and burn mechanisms, exchange token prices are expected to grow steadily year after year.
Even amid DeFi disruption, centralized exchanges will proactively engage in the DeFi ecosystem through proprietary blockchains, blurring the lines between DEXs and CEXs.
“If I must give one suggestion to exchanges, it would be to grant more governance rights to platform tokens,” Li Feng added. “Exchange tokens may not make you rich, but at least they won’t bankrupt you—that’s sound advice.”
*TechFlow reminds all investors to beware of high-risk chasing behavior. The views expressed in this article do not constitute any investment advice.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
