Learn what Uniswap is, how to use it, and everything else in between of the crypto platform.
What Is Uniswap?
Uniswap is a decentralized exchange operating on the Ethereum blockchain. It has no restrictions and lets you trade any token without an intermediary.
The UNI governance token, which allows users to vote on important changes to the protocol, has a total market cap of around $18 billion.
Uniswap has managed to make a name for itself in the Decentralized Finance space, launching back in November 2018. A number of other decentralized exchanges have since launched (including Curve, SushiSwap, and Balancer). But Uniswap is currently the most popular, with a substantial lead.
The platform has been credited for founding the Automated Market Maker model. This also allows users to provide Ethereum tokens to liquidity pools and algorithms set prices (as opposed to order books, which have a centralized exchange that matches bids and asks).
The liquidity pool allows anyone to supply tokens and earn rewards while helping peers trade peer-to-peer. You can provide anything from your own token, to an asset, or another cryptocurrency. The more you participate in the pool by supplying liquidity, the higher your reward chances.
There are hundreds of tokens available on Uniswap. The most common pairs to trade with are such as USDC and WBTC, stablecoins which give you the same value back.
Some of Uniswap’s advantages over centralized exchanges are:
- Safe: Because both parties are transferring money from their own wallets, there’s no need to trust your assets with a third party and little risk of the assets being compromised.
- Global and permissionless: With the advances of technology, anyone in the world with a mobile phone and internet connection can trade. Without borders or limitations on who can trade, any person of any nation has the opportunity to participate.
- Easy To Use: Account signups are not required either.
How to use Uniswap
If you have an Ethereum-compatible wallet and ETH (to pay for gas fees) then you’re all set to start using the platform. The platform can be accessed on app.uniswap.org
On Ethereum-based apps, transactions can be expensive enough to make using the network prohibitive due to the fluctuating gas fees from Ethereum.
A promising solution to high gas fees is the continuous improvement of the Ethereum blockchain.
What is UNI?
After several successful years and its plan to be fully decentralized soon, Uniswap introduced UNI, the company’s native cryptocurrency. This coin lets you govern protocol changes and developments in the project.
Uniswap released it’s native token UNI in 2020. Over a quarter million Ethereum wallets received the free UNI airdrop.
Uniswap has promised to continually airdrop UNI until they reach around 1 billion tokens rewarded.
Why are there so many DEXs with “Swap” in the name?
Because most crypto projects are open source, this lets anyone see how they operate. Then, anyone can create a competing platform.
With more ‘swap’ platforms available, this creates healthy competition. Then, more of these platforms can be created on different blockchains.
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