Last night, Uniswap debuted its Ethereum-based UNI token to the world and began distributing 400 of the suddenly hot tokens to early users of the platform.
Substantial interest surrounding the new token has led Ethereum to pump more than 6% in the last 24 hours. But it may not be for the reason you expect.
Ethereum Rockets 6% In The Last 24 Hours On The Heels Of New Token Rollout
Ethereum is trading over $100 below the 2020 high, and struggling to reclaim the previous trading range.
The number two cryptocurrency by market cap keeps smashing into support turned resistance and falling back down, but price action hasn’t yet turned downward, either.
Related Reading | Is Uniswap’s UNI The Crypto Version of a Stimulus Check at $3 Per Token?
ETHUSD price surged over 6% over the last 24 hours, but it is not simply because Ethereum is suddenly bullish.
Instead, the smart contract focused crypto token is back in enormous demand, thanks to the debut of a new ERC-20 token launched on Ethereum’s mainnet.
ETHUSD 4H UNI Uniswap Announcement Leads To 6% Rally | Source: TradingView
How Uniswap’s New UNI Crypto Token Fueled The Top Altcoin’s Rise
Ethereum’s rally isn’t due to its bullish momentum, its due to the dominance of another new token: UNI.
In the late hours yesterday, Uniswap revealed via a blog post that it would be distributing 400 tokens to all early users of the liquidity pooling platform.
Uniswap has exploded in popularity recently amidst the DeFi frenzy, acting as a launch pad for new projects and tokens.
Now, Uniswap has launched a token of their own, and its caused an increase in demand in Ethereum, but why?
UNI tokens must first be accessed by an Ethereum wallet used to interact with the decentralized platform, and claimed. And because these tokens are ERC-20 tokens, they are require ETH gas to move it from wallet to wallet.
Related Reading | Why Soaring Gas Fees Won’t Let An Ethereum Killer Gain The Upper Hand
For anyone that wants to cash out their UNI and take advantage of what is essentially the crypto version of a stimulus check, they’ll also need some Ethereum to send the transaction over the blockchain.
ETH gas fees have been on the rise, to controversial levels. On one hand, it shows just how in demand Ethereum is, on the other, it puts a spotlight on scaling issues.
With ETH gas fees so high, those wanting to claim their UNI tokens are having to buy Ethereum and send it to be used as gas fees in order to claim the reward.
But as the saying goes, it takes money to make money, and if you want the free crypto, you too might need to buy some Ethereum to get the job done.