niswap is an open-source platform for providing liquidity and swapping tokens and was launched by the founder Hayden Adams in November 2018 on the Ethereum network and set out to be the main destination for users to swap, earn and even vote on future Uniswap proposals.
The Uniswap DEX is an automated market maker (AMM), a collection of smart contracts where users can deposit cryptocurrencies to provide liquidity, create liquidity pools (LPs), and swap tokens.
How does Uniswap work?
No third parties, central order book or any centralised entities are dictating the Uniswap protocol.
Every LP consists of two different assets, e.g. ETH – UNI pool. Uniswap then uses a specific formula to determine the price.
As the leading Decentralised Exchange, Uniswap has expanded beyond the Ethereum mainnet and is Multichain compatible with networks like Optimism, Arbitrum, Celo and Polygon! It won’t be long before we see Uniswap on other major networks like Avalanche and Binance where they compete with other major DEXs.
Uniswap is integrated with some of the largest DApps on the Ethereum network, like Opensea, 1inch, Aave and many more. As they grow larger on other major networks, we will see an increase in DApps integrated with the protocol!
By far, UniSwap is the most used decentralised exchange throughout every blockchain and always has held that title. Especially, when it comes to the Ethereum blockchain, everyone’s first choice is to use Uniswap.
You can swap any token on the Ethereum network by using Uniswap. Whether it is a memecoin that just launched or you are buying $USDC or AAVE for example, as long as there is liquidity in the pool, Uniswap will always allow you to swap your ETH for other assets.
As I mentioned, you can also swap tokens on any other compatible network.
Uniswap Liquidity Pools
We briefly discussed Liquidity Pools. There are two ways of providing Liquidity with Uniswap. One is by using V2 which is the traditional method of providing liquidity.
V3 on the other hand is a new method which allows users to customise the capital in the price range get think will generate the best yield. This is very unique and is a great option for those who are heavy on LPs.
Uniswap NFT Marketplace
The newest edition to the Uniswap application is the NFT marketplace which is home to Ethereum’s largest and newest NFT collections. You can buy, sell and swap NFTs and the marketplace is known to have competitive rates in comparison to its competitor, Opensea.
Most of the time, the floor price is cheaper on the Uniswap Marketplace, depending on the NFTs you are buying. Although Opensea has a wider range of collections, Uniswap has only just started its NFT journey. In the future, who knows who will be the NFT market leader…
Like most decentralised applications, Uniswap enables its community to govern the protocol by using UNI tokens to vote on any future proposals the platform releases.
Uniswap uses a Three-Stage Governance Process:
This process determines where there is a sufficient desire to make changes to the proposal. After 48 hours, a majority vote with a 25k $UNI threshold wins. If the check does not require changes, the proposal will be closed.
This process returns feedback from the temperature check for discussion around the proposal.
The final process includes the feedback from the consensus check. This period lasts 7 days and a majority vote with a 40M UNI yes-vote threshold wins.
According to the on-chain analytics website, DefiLlama, Uniswap has the 4th largest TVL as a dApp, locking in over $3.7 billion! The DEX averages around $400M-$700M in volume daily and is able to gather around $500K-$830K in fees every 24 hours!
It is safe to say that this is possibly one of the most profitable protocols in the entirety of the blockchain. With more users joining the world of Web3 on a daily basis, the first stop for most of them will be Uniswap!
How To Buy Uniswap's Token UNI
For those looking to buy Uniswap UNI, we recommend using one of the centralised exchanges below. From there, you can send your UNI or ETH tokens to a hardware wallet or native Ethereum (EVM-Compatible) DeFi wallet, also explained below.
The UNI token is currently available on pretty much every centralised exchange. Here are our recommendations with some juicy sign-up bonuses!
- Binance - The most popular CEX in the world
- ByBit - EARN UP TO $30K in DEPOSIT BONUSES
- BitGet - Trade on BitGet and receive 0% Deposit Cashback + $5,000 DEPOSIT BONUSES
- Coinbase - Spend $100 and Get $10 back!
- Cryptocom - Official Fifa 2022 World Cup Sponsor
It is always recommended not to store your crypto on a centralised exchange due to the various risks it may hold. That is why we recommend using a hardware wallet or a secure DeFi wallet.
DeFi and Hardware Wallets
If you are buying UNI through your DeFi wallet, you will need to have your wallet set up and ready with ETH or any compatible blockchain tokens to use for gas fees. If you haven’t set up a DeFi wallet or don’t know how to use Uniswap on Ethereum, Polygon, Arbitrum, Optimism or the BNB Chain, you can check out our tutorial videos down below:
Remember it is always recommended to use a Defi wallet or better yet a hardware wallet like Trezor to store your cryptocurrencies.
The protocol has amassed over $1.3 Trillion, with over 130 million trades and across all chains has amassed a Total Value Locked of $3.94B which is the second highest DEX TVL, just under Curve.
However, Curve is available on almost double the amount of networks than Uniswap. There could be a major flip once Uniswap is compatible with more networks…
At the time of writing, UNI is sitting at a price of $7.04 with a large market cap of $5.36B, ranking it the 18th largest market cap, according to CoinMarketCap. The $UNI token is down 84.4% from its ATH of $44.97 and a market cap of over $22.5B in May 2021!