Ȗniswap | 𝑬xchange
Uniswap Exchange is a well-known distributed trading platform that helps automate the exchanging of contributions to the group (DeFi) tokens.
Last updated
Uniswap Exchange is a well-known distributed trading platform that helps automate the exchanging of contributions to the group (DeFi) tokens.
Last updated
Uniswap (UNI) has reached the top of one of the most popular trading protocols on Ethereum. With a market cap of over $4,000,000,000 USD, Uniswap has become a unicorn on its way to becoming one of the most useful protocols on the Ethereum network. But is this cryptocurrency’s supreme utility going to last? Could UNI continue to lead the charge or will other exchanges make the protocol obsolete? In this article, we’ll answer these questions by explaining what Uniswap is, how it works, and how it differs from other popular Ethereum tokens. It took us countless hours of dedicated research to write this piece. Thus, we can guarantee that this guide explains everything you need to know about Uniswap.
Uniswap is a decentralized protocol that enables users to trade Ethereum tokens. The protocol is powered by the Ethereum blockchain and allows anyone to create a market for any ERC20 token. Uniswap was launched in November 2018 and has become one of the most popular protocols on the Ethereum network.
Uniswap is often described as the leading DEX on the Ethereum blockchain. A DEX is a decentralized exchange that does not rely on a third party to hold the user’s funds. Instead, the users themselves are responsible for their own funds. This is done by using smart contracts that are stored on the blockchain.
The main advantage of a DEX is that it is much more secure than a centralized exchange. This is because there is no central point of failure that can be hacked.
Additionally, DEXes are much more censorship-resistant than centralized exchanges. This is because there is no central authority that can decide to delist a token. For example, a centralized exchange can decide to delist a token if it does not agree with the project’s philosophy or if the token does not meet the exchange’s listing requirements. However, a DEX cannot do this because it is decentralized.
The protocol’s popularity can be attributed to its ease of use and utility. Uniswap does not require users to have an account or go through Know-Your-Customer (KYC) verification. Moreover, the protocol does not charge any fees for trades. Rather, it collects a 0.3% fee from each trade that goes towards rewarding liquidity providers. Liquidity providers are users who add capital to the Uniswap pool and earn a portion of the fees collected by the protocol.
In simple terms, Uniswap is a decentralized exchange that allows users to trade Ethereum tokens without the need for an account or fees. The protocol is powered by the Ethereum blockchain and enables anyone to create a market for any ERC20 token. This benefits both users and developers as it makes it easy to trade any token on the Ethereum network.
For example, let’s say you want to trade two ERC20 tokens, Token A and Token B. Uniswap would allow you to do so without the need for an account or fees.
In addition, the protocol also enables developers to create markets for their tokens without the need to list them on an exchange. Many newly launched tokens use Uniswap as their primary method of trading. This is because the process of listing on exchanges can be both time-consuming and expensive. Thus, Uniswap provides a much-needed service to the Ethereum ecosystem.
The UNI token is used for voting on governance proposals and to provide liquidity to the Uniswap protocol. Some decisions that UNI token holders can decide on are whether to add new features to the protocol or to change the fee structure.
The token was launched via an airdrop in September 2020 and has a total supply of 1,000,000,000 UNI. Once the 1 billion tokens are distributed, UNI will become inflationary at a fixed 2%. This is important to note because inflation will go towards rewarding liquidity providers. In other words, UNI holders who provide liquidity to the protocol will earn a portion of the newly minted UNI. New rewards are needed because the protocol currently relies on trading fees to reward liquidity providers.
To summarize, the UNI token is an important part of the Uniswap ecosystem as it is the incentivizing factor for users to provide liquidity to the protocol. Moreover, UNI holders play a crucial role in governance as they are the ones who decide on the future of the protocol.
