TL;DR
Decentralized trading protocol, UniSwap is known for automating the transaction of DeFi tokens via automated trading. Uniswap utilizes an automated market maker protocol in order to facilitate these trades.
Its goal is to continue the development of its exchange and to keep trading automated and allowing anyone with tokens to be able to trade on its platform. It seeks to improve its efficiency in trading when compared to traditional exchanges.
UNI is Uniswap's governance token. Holders of this token can vote on proposals and help in the development and decision-making of the Uniswap ecosystem.
Introduction
Established in 2018, Uniswap gained significant traction and popularity in 2021 due to the surge in the popularity of defi and token trading. Uniswap is a decentralized exchange, meaning traders can trade tokens for other tokens on its platform. The fees incurred by a trader are paid to liquidity providers.
Defi exists to create liquidity, therefore, providing trading for many popular tokens. It seeks to provide value as an exchange for the Defi sphere. Another thing to note about this decentralized exchange is that users can only trade ERC-20, as it is primarily an Ethereum-based exchange.
What Is Uniswap?
Uniswap is an Etherum based decentralized exchange that allows traders to swap any ERC-20 token. It is one of the more highly popular platforms in the Defi space. Uniswap aims at counteracting one issue present in decentralized exchanges, the lack of liquidity. The way it goes about doing this is by allowing users to swap one token for another, thus the platform does not rely heavily on buyers and sellers creating liquidity. Further, users can deposit liquidity and earn a percentage of fees as an incentive.
Since Uniswap is a decentralized trustless protocol, there is no middleman or custodian that controls the exchange. Instead, it operates through an automated liquidity protocol. There is no order book or central authority facilitating the trades.
The exchange has increased in popularity over the years and has become the top DEX in terms of daily volume traded.
What Coins are on Uniswap
Uniswap has over 6,000+ tokens a user can trade for. These tokens include WBTC, AAVE, USDT, DAI, and ETH, among many others. Any ERC-20 token you can think of can be traded on Uniswap.
What are Uniswap's Fees?
Uniswap charges a 0.3% fee for token swapping, with these fees deposited into liquidity reserves. There are currently no protocol fees, though there is a provision for a 0.05% fee to be switched on in the future.
How To Use Uniswap?
Unswap does not require KYC verification, so beginners don't have to worry about providing proof of identity. You can swap tokens by connecting a wallet, such as MetaMask, selecting which two assets you want to exchange, and the amount you wish to trade.
Due to its decentralized nature, many projects launch directly on Uniswap, giving users access to a wide range of tokens. As a result of its decentralized nature, anyone can list fake coins, misleading inexperienced users into exchanging assets for worthless, sham tokens. Therefore, it is imperative that you DYOR on coins when navigating this exchange.
Final Thoughts
Uniswap is an Ethereum based decentralized exchange. Traders can utilize the platform to trade any ERC-20 token. As such, traders have much more freedom and control over there crypto trading experience.
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