February 25, 2025
This Speedy DEX Could Disrupt Uniswap’s Domination
Dear Subscriber,
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| By Bruce Ng |
When it comes to DeFi, decentralized exchanges, or DEXes, play an integral role.
Not only is that where you can swap cryptos. But they also often allow you to provide liquidity to the platform in exchange for a reward, usually a percentage of the fee for each transaction.
And by owning a DEX’s native token, you can invest in the growth of a DEX without utilizing its offerings.
The top DEX is currently Uniswap (UNI, “C+”). This Ethereum (ETH, “B+”)-native DEX has grown over the years to support thirteen different networks. That variety has made Uniswap very popular.
Total value locked, or TVL, is a measure of how much liquidity is locked on a platform. It’s also a good indicator of active usership.
And Uniswap’s TVL is no joke at an impressive $4.34 billion.
When it comes to crypto, I’m a growth investor. I target small-cap cryptos because of their potential to go for outsized returns if they catch on.
And there is one new DEX that has the makings of a great crypto disruptor. One that could dismantle Uniswap’s DEX domination: Shadow Exchange (SHADOW, Not Yet Rated).
Out of the Shadows, Into the Spotlight
Shadow is a DEX build for the new Sonic (S, Not Yet Rated) Layer-1 blockchain, which launched on Dec. 18 last year as a replacement for one of the oldest but fastest blockchains, Fantom.
And so far, its numbers are turning heads.
Shadow’s TVL hit a peak of $164 million earlier this week before falling slightly with the recent broad market pullback. That’s up an insane 152% from $65 million just one week ago!
Remember, TVLs are also a solid indication of active usership in DeFi. The higher the TVL, the more people are using Shadow.
Its weekly liquidity incentives reached over $10.34 million, showcasing its ability to attract capital.
How is such a new DEX growing so fast?
Because Shadow makes the most out of Sonic’s speed.
(If you’re familiar with the Sonic the Hedgehog characters and their speedy natures, the names of these projects are likely starting to make sense.)
Shadow’s Speed Could Make It Untouchable
Shadow leverages Sonic’s sub-second block times and low-cost structure to focus on concentrated liquidity.
That’s a strategy for liquidity providing that specifies an exact price range for your liquidity to be utilized. By narrowing your range, you can increase the yield you get as a reward.
Shadow’s goal is to optimize liquidity efficiency for high-frequency trading. That way, it can offer tighter spreads and lower slippage for traders, all while rewarding liquidity providers with higher returns via adjustable positions.
You can also stake the DEX’s staking token, xSHADOW, using a flexible staking model that enhances user engagement and platform utility.
This tells me the Shadow Exchange team is likely a capable group with experience in DeFi. Their development of the xSHADOW system suggests technical proficiency and innovation in addressing sustainability issues of earlier models.
Their project’s impressive price performance — even in this correction — suggests the same.
Since its launch in late January at about $8, Shadow’s price action has been phenomenal.
It rallied an unbelievable 2,587% to its all-time high of $215 … even as the broad market was stuck moving sideways!
And even with today’s broad downside pressure, it’s still trading north of $100.
Final Thoughts
Clearly, Shadow is riding a wave of hype as Sonic’s flagship DEX. But more than that, it’s blending innovative tokenomics with a high-performance chain to deliver eye-popping stats.
Sentiment on X is overwhelmingly bullish, with users pointing to its rapid price growth and its position as the top DEX on Sonic.
Even with this price action, posts online highlight Shadow’s “criminally undervalued” status. This is thanks to its ability to generate fees that rival or exceed much larger projects, which in turn, fuels excitement.
This combination of hype and real utility has it outshining many peers in efficiency and user rewards.
However, this enthusiasm is tempered by the typical crypto volatility.
In addition, there are plenty of headwinds that could stand in Shadow’s way, long term. It has a poor ratio of circulating supply to its fully diluted valuation.
And, if it wants to break containment to go against a dominator like Uniswap, Shadow will have to evolve into a multichain DEX.
Still, this speedy DEX has certainly earned its place on my watchlist.
If you have a tolerance for risk and volatility — which come part and parcel with any new crypto project — you may want to consider adding it to yours.
Best,
Dr. Bruce Ng
P.S. As I mentioned, targeting smaller and newer crypto projects is one way to try and maximize your returns.
Just look at Shadow’s incredible jump of over 20x in less than one month!
These sorts of gains are rare and targeting them is challenging, but they are achievable.
To learn more about how we target them, I suggest you watch my colleague Juan Villaverde’s latest urgent briefing, 245x Better Than Bitcoin.
But hurry — it’ll go offline this week.
