What Is Uniswap?
Uniswap is among the leading decentralized crypto exchanges in the market today. It runs on the Ethereum blockchain and is considered to be one of the most exciting crypto exchanges in 2021 which is totally different from many other exchanges which are centralized like Coinbase.
Aren’t crypto exchanges decentralized?
The operations and processes on most exchanges are decentralized. However, they are often governed by an authority which is usually the company that owns and runs that particular exchange. This means that transactions become slow in some cases. For instance, centralized exchanges use ‘market depth’ which refers to the amount of open buy and sell orders for a certain asset in the common order book-based trading system. If you want to sell certain crypto at a price, you will need to wait for someone who is looking to buy at that price. This could be time-consuming. With a decentralized platform, the waiting time can be reduced considerably.
How is Uniswap different?
Uniswap is a P2P (peer-to-peer) platform. It is fully decentralized which means that it is not owned by a single authority. Unlike centralized platforms that use the order book system, it uses an automated liquidity protocol. Since it is built on the Ethereum blockchain, it is ERC-20 token-compatible which means you can use popular platforms like the MetaMask wallet.
Why should I use Uniswap?
Uniswap has the following unique features:
- Open source – Anyone can copy the code and build their own exchanges.
- Cost – Unlike centralized exchanges where you will have to pay certain charges such as gas fees, this platform is not profit-driven. In fact, allows are able to list tokens on the exchange without any charges.
- Control – In Uniswap, you control your own funds instead of centralized exchanges where you allow the system to manage your funds. This also ensures better security of your funds.
What is Uniswap’s UNI token?
The native token used in Uniswap is the UNI which was launched back in September 2020. With this token, users have development and voting rights. This can be used to determine the direction of the platform, changes to be made and how they should be distributed to the stakeholders.
How big is Uniswap?
The latest statistics show that Uniswap has more than US$3 billion worth of crypto assets moving on its platform. It is currently the fourth-largest DeFi (Decentralized Finance) platform operating in the market today.
How does Uniswap work?
In general, Uniswap operates on 2 types of smart contracts which are automated platforms to carry out certain functions (that meet with its conditions) which are Factory Smart Contract and Exchange Contract. The former allows users to add new tokens to the platform while the latter is the program that facilitates any trade processes on the platform.
How do I use Uniswap?
You will first need to have an ERC-20 compliant digital wallet. MetaMask is the most popular although you can use others such as Frotmatic, Coinbase Wallet, Portis and WalletConnect. Next, you will need to add ETH to your wallet. This is for you to either trade or to pay a gas fee (if required).
- Create your account on Uniswap and then connect your wallet. You will then be provided with the option to swap tokens directly.
- Enter the amount and you then confirm your transaction on your wallet.