How Uniswap' ban on trading synthetic assets impacted Mirror Finance?
On 23rd July Uniswap banned trading Mirror Finance synthetic assets from it's platform due to an "evolving regulatory landscape" reason. Lets us examine how it impacted Mirror's TVL & Volume.
But there is no significant impact on Mirror's TVL on Terra Blockchain.
Due to evolving regulatory concerns Uniswap banned several synthetic assets from it's web application but not from the Ethereum blockchain. Though assets on Uniswap can be traded using several other applications, getting banned on Uniswap's web app has visible impact on Mirror Assets on Ethereum blockchain. The trading volume is dropping significantly and the volume of Mirror Assets traded. on Ethereum are at its lowest in the past 10 weeks.
We see visible impact on Ethereum blockchain but how about Terra blockchain? Terra blockchain is the home group for Mirror Finance and let us explore if there is any impact on Mirror's TVL on Terra Blockchain.
How about the total value locked in various Mirror assets pools deployed to Uniswap? There is a drop of about 20%+ starting July 23rd as shown in the chart below.
Compared to the above bar chart, the following line chart shows clear decline in trading volume on Uniswap starting July 23rd.
Let us examine how Uniswap's decision impacted Mirror Protocol. First let us look at the trend of Mirror synthetic asset transactions on Uniswap ecosystem. As you see in the chart below the number of transactions are consistently dropping from July 23rd and the past few days seems to be the lowest number of swaps carried out in the past 10 weeks window.
On July 23rd 2021 Uniswap's web application banned trading of Mirror Finance's assets along with several other synthetic assets from its platform. In a blog post Uniswap cited "evolving regulatory landscape" as one of the reason for the decision to remove synthetic assets from its platform. As Uniswap being one of the most popular Distributed Crypto Exchanges, it created a big uproar among crypto circles and it triggered Uniswap's founder to come out with the statement below. Uniswap explained that these assets are banned only from its web application hosted on app.uniswap.org but not from Ethereum blockchain smart contracts.