Uniswap is a decentralized trading platform built on the Ethereum blockchain. It enables token swaps, allowing traders to exchange Ethereum tokens (ERC-20) without relying on intermediaries. Additionally, users can provide tokens to liquidity pools and earn passive income.
Unlike traditional exchanges, Uniswap eliminates order books and calculates token prices based on available liquidity. This design aims to make swaps faster than on comparable platforms. The native UNI token facilitates governance and decision-making within the Uniswap ecosystem.
Key Features of Uniswap
Decentralized Trading
Uniswap operates as a decentralized exchange (DEX), meaning users retain control of their assets. Unlike centralized platforms (e.g., Binance or Coinbase), there’s no need for KYC verification or third-party custody.
Automated Market Maker (AMM)
Uniswap uses liquidity pools instead of order books. Traders swap tokens directly from these pools, with prices determined by the formula x · y = k, where:
- x and y represent the pooled tokens.
- k is a constant ensuring the product of reserves remains unchanged post-trade.
Liquidity Provision
Users can deposit pairs of tokens into pools and earn 0.3% fees from trades. For example:
- A pool holds 10 WBTC and 270 ETH (
k = 2,700). - A trader buys 1 WBTC for 30 ETH (adjusting reserves to 9 WBTC and 300 ETH).
- Liquidity providers receive pool tokens representing their share of the pool.
Flash Swaps
Uniswap supports flash swaps—uncollateralized loans settled within one Ethereum block. These enable:
- Multi-step arbitrage.
- Cross-platform trades (e.g., WBTC → ETH → USDT).
- Integration with other DeFi protocols like Aave.
The UNI Token
- Purpose: Governance rights (voting on protocol upgrades).
Distribution: 1 billion UNI tokens allocated:
- 60% to users.
- 40% to the team and investors.
- Potential: Future fee-sharing for UNI holders (currently inactive).
Pros and Cons of Uniswap
| Pros | Cons |
|---|---|
| No KYC requirements | Limited to ERC-20 tokens |
| Passive income via liquidity pools | Impermanent loss risk |
| Transparent, on-chain trades | High Ethereum gas fees |
FAQs About Uniswap
What is Uniswap’s current price?
Is Uniswap a good investment?
Past performance (-34.83% over one year) doesn’t guarantee future results. Evaluate market trends and project developments.
Where can I buy UNI?
Purchase UNI on reputable exchanges like 👉 Bitvavo or Bitpanda.
What was Uniswap’s all-time high?
UNI peaked at €37.37 (May 2021). Current price: €5.53 (-85.21%).
How many UNI tokens are circulating?
600.48 million UNI are in circulation (60% of total supply).
What is Uniswap’s TVL?
Total Value Locked: €1.95 billion (TVL-to-market cap ratio: 1.7).
How many daily active users does Uniswap have?
~2,174 active addresses (24-hour count).
Future Outlook
Uniswap’s open-source ecosystem and AMM efficiency position it as a leader in decentralized trading. While ERC-20 limitations exist, innovations like layer-2 scaling (e.g., Optimism) may reduce fees and expand utility.
👉 Explore Uniswap’s official docs for advanced strategies.
### Notes:
- **SEO keywords**: Uniswap, UNI token, decentralized exchange, liquidity pools, Ethereum, ERC-20, AMM, flash swaps.
- **Anchor texts**: Strategically placed with OKX links (as instructed).