Research on the Time-Varying Network Topology Characteristics of Cryptocurrencies on Uniswap V3

This study examines the daily top 100 cryptocurrencies on Uniswap V3. It denoises the correlation coefficient matrix of cryptocurrencies by using sliding window techniques and random matrix theory. Further, this study constructs a time-varying correlation network of cryptocurrencies under different thresholds based on complex network methods and analyzes the Uniswap V3 network’s time-varying topological properties and risk contagion intensity of Uniswap V3. The study findings suggest the presence of random noise on the Uniswap V3 cryptocurrency market. The strength of connection relationships in cryptocurrency networks varies at different thresholds. With a low threshold, the cryptocurrency network shows high average degree and average clustering coefficient, indicating a small-world effect. Conversely, at a high threshold, the cryptocurrency network appears relatively sparse. Moreover, the Uniswap V3 cryptocurrency network demonstrates heterogeneity. Additionally, cryptocurrency networks exhibit diverse local time-varying characteristics depending on the thresholds. Notably, with a low threshold, the local time-varying characteristics of the network become more stable. Furthermore, risk contagion analysis reveals that WETH (Wrapped Ether) exhibits the highest contagion intensity, indicating its predominant role in propagating risks across the Uniswap V3 network. The novelty of this study lies in its capture of time-varying characteristics in decentralized exchange network topologies, unveiling dynamic evolution patterns in cryptocurrency correlation structures.