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-4.63% B-Cash (BCH) 228.01 EUR
+3.91% Ethereum (ETH) 0.0769418 BTC
-2.40% Litecoin (LTC) 0.00262701 BTC
-0.26% B-Cash (BCH) 0.0075851 BTC
-4.55% Bitcoin (BTC) 32060.0361 USDC
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-3.12% Dogecoin (DOGE) 0.1 EUR
+1.10% Dogecoin (DOGE) 0.00000366 BTC
-4.54% Uniswap (UNI) 6.21 EUR
-0.24% Uniswap (UNI) 0.00020654 BTC
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+2.07% Basic Attention Token (BAT) 0.00001577 BTC

Uniswap (UNI)

What is Uniswap?

 

Uniswap is a completely different decentralized exchange protocol built on Ethereum. It uses a relatively new type of trading model called an automated liquidity protocol. This protocol was created by Hayden Adams in 2018 and was built on top of the Ethereum blockchain. Uniswap does not have an order book and allows users to trade without intermediaries, with a high degree of decentralization and censorship-resistance. It even allows users to list tokens on the exchange for free. Notable difference is that the traditional centralized exchanges are profit-driven and charge very high fees to list new coins, unlike Uniswap.

 

How does Uniswap work?

 

Uniswap runs on two smart contracts:

  • “Exchange” contract
  • “Factory” contract

These are automatic computer programs that are designed to perform specific functions when certain conditions are met. In this instance, the factory smart contract is used to add new tokens to the platform and the exchange contract facilitates all token swaps, or “trades.”

 

Automated liquidity protocol

 

The way Uniswap solves the liquidity problem of centralized exchanges is through an Automated liquidity protocol. This works by incentivizing people trading on the exchange to become liquidity providers.

Basic actions that are executed while using Uniswap are:

  • Uniswap users pool their money together to create a fund.
  • Each token listed has its own pool that users can contribute to, and the prices for each token are calculated using a mathematical algorithm run by a computer.
  • Users can execute any trade instantly at a known price provided there’s enough liquidity in the particular pool to facilitate it.
  • In exchange for putting up their funds, each LP receives a token that represents the staked contribution to the pool.
  • Uniswap charges users a flat 0.30% fee for every trade that takes place on the platform and automatically sends it to a liquidity reserve.

 

Benefits of using Uniswap

 

  • Easy to access the crypto market.
  • New tokens that can directly access liquidity.
  • Liquidity providers get profit by simply putting their funds into the liquidity pool.

 

 

Risk Warning: Cryptocurrency trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with Coinsbay, otherwise seek independent advice if necessary. Crypto, CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing the entirety of your initial investment). You must assess and consider them carefully before making any decision about using our products or services.

The information on this website is general in nature and doesn't take into account your personal objectives, financial circumstances, or needs. It is not targeted at the general public of any specific country and is not intended for distribution to residents in any jurisdiction where that distribution would be unlawful or contravene regulatory requirements.