@02rowing

Uniswap's price-to-sales (P/S) ratio dropped from 180 to 40 despite volume growth due to a disconnect between its token price (UNI) and the protocol's revenue generation. While trading volume surged, driven by DeFi adoption and Layer-2 scaling (e.g., Unichain), UNI's price didn't keep pace, likely due to dilution from token emissions starting September 2024 (2% annual inflation) and limited direct revenue accrual to token holders. Unlike traditional firms, Uniswap’s governance token doesn’t entitle holders to fees, which are redistributed to liquidity providers instead. This reduces UNI’s perceived value relative to sales (protocol fees), compressing the P/S ratio. Additionally, market sentiment, competition from other DEXs, and broader crypto market dynamics may have suppressed UNI’s price, outweighing volume-driven revenue gains.

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