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Introduction:

In the crypto winter of 2022, a series of unfortunate events triggered a domino effect of financial losses that led to a disintegration of investor confidence in cryptocurrency. In May 2022, the TerraUSD and Luna stablecoins crashed, taking billions of dollars of investor equity with it. That crash led to a crisis of confidence in the overall stability of the cryptocurrency markets, dragging down the values of the market overall.

The market was further impacted by the bankruptcy of crypto exchange FTX in November 2022, which also wiped out billions of investor equity. With FTX, allegations of financial wrongdoing and mismanagement have been levelled against the firms leadership, including the company's founder Sam Bankman-Fried.

The FTX bankruptcy has had widespread impact on the cryptocurrency industry, also leading to the bankruptcy of the BlockFI exchange due to its exposure to FTX assets. The BlockFi collapse led to further investor losses.

Based on these factors, we can consider December 2022 as the beginning of the cryptocurrency market's winter season. Therefore, active user is defined as user conducting his/her first transaction before December 1st 2022 and his/her latest transactions after 1st December 2022.

Data graphic 1:

Blurb 1:

Between December 2022 and September 2023, there was a noteworthy decline in the total number of Uniswap users, comprising both existing and new users, with each category experiencing a decrease of approximately 10,000 users. Among these months, May 2023 stands out as a remarkable point in time. During that month, Uniswap witnessed its peak user engagement, with an impressive 128,800 existing users and an even more remarkable 160,800 new users. It is also the only month when number of new users outnumbers number of existing users during this period.

Data graphic 2:

Blurb 2:

The "Retention_percentage" values represent the percentage of users who continued to engage with the product in the specified month relative to the number of users in the initial month (M0). Generally, the retention percentages decline as the months progress. The first month (M1) typically has the highest retention percentage for each initial month (M0). This indicates that a significant number of users tend to continue to engage in Uniswap after their initial engagement.

Data graphic 3:

Blurb 3:

The data indicates a relatively stable trend in the number of active traders and the frequency of their swaps over time. However, a significant shift becomes evident when examining the USD swap amounts. This shift can be attributed to the influence of what's commonly referred to as the "crypto winter" on active users.

The "crypto winter" typically denotes a period of prolonged market downturn or volatility in the cryptocurrency space. During such times, users tend to exhibit caution and hesitancy in their trading activities. This caution is reflected in the significant decrease in the USD swap volume, as traders become apprehensive about executing large-volume trades in an unstable market.

Notably, the latest month in the dataset records the lowest USD swap volume during the observed period, underscoring the impact of this market sentiment. This observation suggests that users are not only trading less frequently but also reducing the size of their trades as they navigate the challenges posed by the crypto winter.