Uniswap is a decentralized exchange (DEX) built on the Ethereum blockchain, enabling traders to swap ERC-20 tokens instantly without intermediaries. The network emphasizes censorship resistance, security, and self-custody, eliminating the need for third-party intermediaries.
Unlike centralized exchanges that rely on order books, Uniswap operates via an Automated Market Maker (AMM) system—a permissionless liquidity pool where users trade directly on-chain.
Key Features of Uniswap Ecosystem
- Uniswap Labs: The company developing the Uniswap protocol.
- Uniswap Protocol: A decentralized crypto exchange on Ethereum.
- Uniswap Interface: Web-based platform for user interactions.
- Uniswap Governance: A decentralized system using UNI tokens for decision-making.
Originally launched on Ethereum, Uniswap now supports multiple blockchains like Polygon, Arbitrum, and Optimism, enhancing its cross-chain flexibility—a major draw for DeFi users.
👉 Trade UNI Tokens with Low Fees
How Does Uniswap Work?
Uniswap facilitates token swaps through liquidity pools created by users. These pools consist of paired tokens, and prices are adjusted algorithmically based on supply and demand. Liquidity providers earn fees from trades executed in their pools.
Process Overview:
- Users deposit two tokens to create a liquidity pair.
- Traders swap tokens against these pools, altering token ratios and prices.
- Providers earn 0.3% fees per trade.
UNI Token Economics
- Circulating Supply: ~734M UNI
- Max Supply: 1B UNI
Distribution:
- 60% to community members
- 21.266% to employees
- 18.044% to investors
- 0.69% to advisors
Inflation begins after four years at 2% annually to incentivize ongoing participation.
Founders & Development
Hayden Adams, a former mechanical engineer, founded Uniswap in 2018 after learning Ethereum development. Supported by Ethereum Foundation grants and advisors like Vitalik Buterin, Uniswap has grown into Ethereum’s top DEX by Total Value Locked (TVL).
Project Highlights
- NFT Integration: Acquired Genie (NFT aggregator) in 2022, allowing NFT trades alongside tokens.
- Swap Widget: A plug-and-play tool for third-party apps (e.g., OpenSea) to enable token swaps without leaving their platform.
FAQs
Q: How do I earn rewards on Uniswap?
A: Provide liquidity to pools and earn trading fees or participate in governance staking.
Q: Is Uniswap safe to use?
A: Yes, it’s non-custodial and audited, but always verify smart contracts before interacting.
Q: What chains support Uniswap?
A: Ethereum, Polygon, Arbitrum, and Optimism.