Uniswap – a crypto trading protocol on the Ethereum blockchain
Fully decentralized, Uniswap is a permissionless and censorship-resistant crypto trading exchange protocol. It is built on top of the Ethereum blockchain. Uniswap was built in 2018. Being on the Ethereum blockchain it allows all the ERC 20 tokens and bases used like wallets. It is open-source, meaning anyone can copy its code and use it to build a decentralized exchange. Uniswap differently from other crypto platforms will allow users to list tokens for free.
On the Uniswap platform, users have control over their funds, this is also an advantage for it being a decentralized exchange platform. This also makes it cheaper compared to other platforms. It allows for faster exchange because it doesn’t use the long list process. Indeed on other platforms like Binance an order is placed and a buyer has to appear on the other end to complete the trade. Uniswap provides the liquidity that is lacking on other platforms.
UNI – the Uniswap token
Users who add assets in the traded pools on the protocol are called liquidity providers. They get a proportion of the token as transactions fee. The crypto trading protocol uses UNI as its native currency on the platform. The UNI token was officially launched in September 2020. UNI holders are the governing body of the platform. They decide what happens on the platform. For example in cases where there is a suggestion to gift users with UNI tokens, UNI holders vote in agreement or disagreement with the proposal.
Before Uniswap, there was the Unisocks token which made money to members. Members were entitled to a real limited edition of designer pair of socks shipped to any part of the world. Every member is anyone who owns a Unisocks token. The socks launched and were selling at $12 a pair and the price has rocketed to over $3000.
Uniswap is amongst the top Decentralized Finance (DeFi) protocols with a market capitalization of over $3 billion on its crypto trading protocol. It has bee developed by Hayden Adams, a former mechanical engineer at Siemens. It has raised millions of dollars over the years.
Attacks on this decentralized exchange protocol
Sushiswap platform came with a vampire attack on Uniswap where they were aiming at transferring users and liquidity to themselves. Hayden Adams came up with the plan to launch the UNI token. He offered free tokens to anyone who had had an interaction with the Uniswap crypto trading protocol. This has led to the growth of this protocol because it attracted more liquidity in the pool.
Uniswap is probably a good investment, it has a high market cap, and it is secure. Speculations say that its value is bound to rise but in crypto, everything is on speculations and this brings volatility in prices. Anyone investing in Uniswap should do that with what they can comfortable lose.
You may be interested in our article on Pancakeswap.
This article is not investment advice. Do your own research before investing in the cryptocurrency market.