Investing in Uniswap (UNI) – everything you need to know

Uniswap (UNI) is the primary token for Uniswap DEX (decentralized exchange). Uniswap is currently the largest DEX in the world in terms of market capitalization. It’s also the most popular Ethereum Dapp out there. Uniswap plays an important role in promoting innovation and adoption in the crypto market. The platform thus posted record growth this year. According to a recent Dune Analytics report, Uniswap’s current market share is increasing by 63%.

In particular, Uniswap is a protocol that allows buyers and sellers to exchange ERC-20 tokens in a trustworthy manner and without permission. ERC-20 tokens are the most popular style of tokens right now. They are located on the Ethereum network and are interoperable between all ERC-20 compatible wallets, exchanges and dapps. These tokens have seen a sharp surge in usage since DeFi (decentralized funding) began to take off.

DEX

Uniswap is the world leader in DEX and represents a fundamental change in the marketplace. DEXs offer traders a safer alternative to large centralized exchanges that operate in custody fashion. Through this exchange, large amounts of users’ cryptocurrency are stored on the network. These wallets are prime targets for hackers looking for a high payday. In contrast, DEXs are not subject to custody. They never hold your money directly. In this way, Uniswap inherits the advantages of the blockchain and eliminates the disadvantages of central platforms.

What problems does Uniswap (UNI) solve?

Uniswap is designed to address some of the toughest problems in the marketplace. Its decentralized nature helps remove the power and control that has been amassed by major exchanges like Binance and Coinbase. In addition, Uniswap plays a critical role in providing new companies with access to international liquidity.

Uniswap User Growth via THE BLOCK

liquidity

Each project can create a liquidity pool with Uniswap. A developer only has to provide his project token and a corresponding value to the ETH in order to start the pool. This open strategy allows new projects to bring their tokens directly to the market and attract the attention of a wider audience.

The additional liquidity also helps solve the problem of high spreads for illiquid assets on order book exchanges. New projects can create pools of liquidity, building investor confidence in the project, while offering ROI opportunities through arbitrage deals.

LP rewards

Uniswap users can participate as a liquidity provider and earn rewards from trading fees. In particular, a percentage of all trading fees are distributed among the liquidity providers in proportion to their share in the pool. In this way, ordinary users can secure a passive income without having to directly give up ownership of their crypto.

Advantages of Uniswap (UNI)

Uniswap offers significant benefits to users and the market as a whole. Uniswap became a star for its openness and simplified user interface. The trading window for Uniswap is simple. You can execute trades with one click and the whole network is remarkably flexible because of its characteristics.

Flexible

Through this network, anyone can easily swap two Ethereum assets for an underlying pool of liquidity. In addition, any project can create or create a market by providing it with the same value of the two paired ERC-20 tokens. However, this openness also means that you have to carry out your due diligence on all projects. There are many scam and carpet pull tokens that have joined the network.

Censorship resistance

Uniswap has no central authority to block users and seize their funds. There is no fixed decision as to whether you have traded too much or which companies to invest in. It’s a truly global decentralized market that gives everyone equal access. In this way, the platform fully captures the essence of decentralization.

More trading options

Since Uniswap is decentralized, there are usually price differences between the token listings and those of the centralized exchanges. These differences can mean equal returns for those who trade between CeFi and DeFi Arbitrage. There are tons of traders these days making profits by taking advantage of price differences between Uniswap’s price quotes and the rest of the market.

Uniswap growth

Uniswap growth

To back up

Uniswap is an open source project that has been seriously reviewed by the developer community. All of the intelligent contract coding is secure and the platform is not subject to custody, so hackers do not profit from attacks. When using Uniswap, you still have to be careful with carpet pulls and scammers as there are no quality control measures in place for new projects.

Private

DEXs give you more data protection than centralized exchanges. These protocols are without permission, do not require a KYC (do you know your customer) and allow you to trade without having to register and log into the market. In this way, the entire structure of these platforms is geared towards anonymity.

compatible

Uniswap meets the standard requirements for ERC-20 tokens. The platform also supports third-party API integrations. These protocols give investors the ability to use external tools in their trading strategies. Today there are several third party interfaces, trading bots, and market management tools designed by Uniswap to improve UX.

How does Uniswap (UNI) work?

Uniswap eliminates the traditional order book model and introduces an Automated Market Maker (AMM) protocol that allows users to trade a smart contract called a liquidity pool. This approach offers open access to the market. Anyone can exchange tokens, add tokens to a pool to earn fees, or list a token on Uniswap.

Uniswap pools become smart contracts and users trade against these liquidity pools. This automated liquidity protocol links every token to the ETH. Interestingly, ERC-20 to ERC-20 swaps are transactions that convert ERC20a to ETH and then convert to ERC-20b in a single transaction.

Price discovery

DEXs like Uniswap struggled in their early days to find the best pricing engines. The original version of Uniswap relied on arbitrageurs for pricing. The latest version of Uniswap eliminates this model and instead incorporates advanced oracles. Oracles are off-chain sensors that can transmit data to and from the blockchain.

Uniswap V2 router contract

Developers can add new tokens to Uniswap using the Uniswap V2 router contract. This smart contract is critical to Uniswap’s open approach to market development. In particular, anyone can see these contracts on the Ethereum blockchain.

Liquidity pools

Uniswap pioneered the use of liquidity pools. These pools contribute to innovation by giving new platforms access to capital. There are currently thousands of liquidity pools in use on the platform. Also, liquidity providers make profits simply by putting their funds into these liquidity pools. In particular, users deposit tokens in a smart contract for liquidity pools and receive pool tokens in return. These tokens can be exchanged immediately for ETH at any time.

Uniswap (UNI) token

The whole system uses UNI as the primary token. UNI is an ERC-20 token compatible with the Ethereum ecosystem. Currently, UNI is listed on various other popular exchanges including a number of the best performing centralized exchanges such as Coinbase Pro.

Uniswap money market

Uniswap recently ventured into the DeFi sector with its money market function. With this system, users can deposit UNI-LP tokens as security for a loan. These short term loans are repaid with interest. In particular, liquidity providers earn a percentage of that interest for borrowing their digital assets through the credit pools.

History of Uniswap (UNI)

The story of Uniswap (UNI) begins in 2016. At that time, the founder of Ethereum, Vitalik Buterin, proposed the concept of a decentralized automated market maker. It only took a year for another well-known crypto developer to take up the project. Hayden Adams implemented the concept with the help of the ETH community. In particular, he has received various grants including a $ 100,000 grant from the Ethereum Foundation.

Hayden Adams

Hayden Adams Uniswap (UNI) founder

Today Uniswap plays an important role in the market. The recent explosion in DeFi platforms has made Uniswap even more valuable. These new projects depend on Uniswap to enter the market seamlessly. As a result, Uniswap is an important launch pad for the entire DeFi sector.

Use of Uniswap (UNI)

Uniswap is different from using a central switch. For example there is no registration and no KYC. To get started, all you need to do is plug in a supported Ethereum wallet. To perform this task, simply click on “Launch the app” in Uniswap and then on “Connect to a wallet”. In particular, Metamask is a free ERC-20 wallet that integrates well with Uniswap. Once connected, you can start trading.

How do I buy Uniswap (UNI)

Buying UNI is easy. The reputation and longevity of this token make it available on most major exchanges. Binance offers a variety of UNI trading pairs. To get started you need to register for an account. Registration is quick and easy. However, you need to verify your identity before you can participate in any trades.

Once you are registered, you will need to fund your Fiat account. This is done by bank transfer or debit card. After your account is active and you have funds, you can switch your fiat to crypto. It is recommended that you convert to BTC. Now that you have BTC, you can exchange BTC for UNI directly. The entire process takes about 20 minutes the first time.

How to save Uniswap (UNI)

UNI tokens are easy to store. You can keep these versatile digital assets in any ERC-20 compatible wallet.

If you’re looking to make a larger investment in UNI or HODLE that crypto for an extended period of time, a hardware wallet is the best option. Hardware wallets keep your crypto offline in the “cold store”. This strategy makes it impossible for online threats to access your inventory. The Ledger Nano S or the further developed Ledger Nano X both support Uniswap (UNI).

Uniswap – a pioneer in the market

Since day one, Uniswap has helped drive the adoption of cryptocurrencies on a large scale. Today there are a number of DEXs that have copied the strategy of this unique platform. However, no one has seen the success of this decentralized network. For these reasons, you can assume that Uniswap (UNI) will continue to have a high market value in the years to come.

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