Uniswap (UNI): Everything you need to know

Uniswap (UNI)

Uniswap (UNI): Everything you need to know

 The Uniswap protocol, built on the Ethereum blockchain, allows users to easily exchange between any ERC-20 tokens in a completely decentralized manner. This means that users can choose to easily trade Ethereum-based tokens directly from their own personal wallets without having to give up their custody of funds throughout the process.

Launched in November of 2018, Uniswap was founded by Hayden Adam, a young yet talented developer/designer who was relatively new to Solidity. With a $100k grant from the Ethereum Foundation, Hayden and his small team of less than 10 were able to build a compelling DEX which has garnered significant traction since launch. Back in April of 2019, Uniswap closed a $1M seed round lead by Paradigm. With this, Uniswap went on to release Uniswap V2 in May of 2020. Uniswap has since raised an $11M Series A round and launched its native governance token.

Uniswap is an automated liquidity protocol and operates using two smart contracts. It is one of the most popular decentralized exchanges or DEX. You can become a liquidity provider for a pool on this protocol and swap for other currencies.

Uniswap has 2 main functions. This includes swaps and pools.

• Uniswap Swap enables users to exchange ETH currency for other ERC20 tokens.
• Uniswap liquidity pool allows users to make money by providing liquidity. Users make money by depositing tokens in the pool. In return, they receive pool tokens.

This liquidity protocol gives you access to exchange ERC20 tokens. After connecting to the cryptocurrency wallet of your choice, you can start exchanging coins.

Uniswap removes the concept of order books in favor of an automated market maker. Rather than specifying price what price to buy or sell at, users merely select an input and output token while Uniswap provides a market rate. Simply connect a web 3 wallet, select the asset you want to trade, the asset you wish to receive and taaac! Uniswap automatically processes the transaction and updates your wallet balance.

Why should I prefer Uniswap?

Compared with other DEX competitors, Uniswap has many advantages for small traders. Specifically, Uniswap does not charge listing fees, does not require local tokens, and is the cheapest gas cost in any DEX. The project is open source on GitHub and essentially unlicensed, which means that anyone can create any ERC market as long as they have an equal amount of ETH to support it. Essentially, this allows new items to create a base price for their tokens after adding appearance to the game. Uniswap is currently one of the most active DEXs and quickly became the actual exchange for DeFi tokens.