Don't Swap Horses in Midstream: A Centralization Study of Uniswap on Ethereum

Uniswap is regarded as the leading decentralized exchange (DEX) platform, allowing users to trade (i.e., swap) one asset for another without intermediaries, thanks to blockchain technology. The platform consists of smart contracts holding asset reserves, called liquidity pools, and its widespread adoption constitutes an opportunity for assessing whether the promises of decentralization of DEXes are effectively fulfilled in practice. For this reason, in this paper we propose an analysis of the Uniswap ecosystem, focusing on the implementation of version 3 on the Ethereum blockchain. First, we study liquidity pools and their core operations, aiming to quantify the overall activity levels. Next, we focus on liquidity provision to assess whether users diversify their participation across multiple pools. We then analyze asset swapping activity, identifying the most active pools and the most frequently traded assets. Finally, we perform a complex network analysis of multi-hop swaps, namely trades routed through multiple pools. We represent them as a graph and study its topological properties. Results show that pool creations and activity have grown steadily, but many pools trigger few operations and remain active for at most two weeks. Also, trader activity concentrates in pools involving the Wrapped Ether asset and major stablecoins, while about 60% of liquidity providers hold only a single position, thus participating in only one pool. Finally, network analysis suggested a preferential attachment phenomenon, with a few pools handling most swaps and acting symmetrically as both entry and exit bridges.