Large exchanges such as Binance and Coinbase may be among the best exchanges for buying and selling cryptocurrencies. But Uniswap has features that set it apart from other exchanges. What is this exchange and what are its features? How can you use Uniswap and on what platform is it running? In this article, we will review all the features and facilities of the Uniswap exchange.
What is Uniswap?
Uniswap is a decentralized exchange that was launched in 2018. In this exchange, you do not need to provide your cryptocurrencies to the exchange and wait for someone to buy. In fact, Uniswap uses a new type of trading model called automated liquidity protocol. This protocol, launched on Ethereum, is used for swapping ERC20 tokens. With this protocol, you no longer have to wait for the other party to trade and any trade is done immediately (with the specified price). Uniswap is compatible with MetaMask and MyEtherWallet wallets.
How Uniswap works?
This exchange is executed with an exchange and factory contract.
- The factory smart contract is used to add new tokens
- Exchange contract facilitate token swaps
The open-source nature of this exchange allows anyone to copy code for decentralized exchanges. Also, with the Constant Product Market Maker Model feature, the user can list tokens for free in this exchange. A new Uniswap smart contract and liquidity pool must also be created for the token. This requires very high fees in centralized exchanges. To start the liquidity pool, whenever a person adds a new ERC-20 token to an additional exchange, he must add a certain amount of the selected ERC-20 token, and an equal amount of another ERC-20 token.
price of tokens
The size of the liquidity pool will determine how much the price of tokens will change during the trade. The more money there is in a pool, the less likely it is that prices will fall.
The UNI token is Uniswap native token. It is a governance token that was introduced in September 2020. Priced at around $ 25, the token ranks 14th in the cryptocurrency market. This token gives holders the ability to vote for and participate in new changes to the platform, such as structural changes in fees and so on. Max Supply & Total Supply This token is 1,000,000,000.
Start Swapping on Uniswap
At Uniswap, you can buy your own tokens without any intermediary or a third party. You need to have some ETH in your wallet to get started. The best wallets include Metamask / WalletConnect / Coinbase Wallet / Fortmatic / Portis. ETHs is used for any transaction fees as well as for trading ERC20 tokens. For example, if you want to trade USDC for LINK, you must have some USDC in your wallet and some ETH for the transaction fee. Now you can start trading.
- Log in to the official Uniswap site
- Click Connect to a wallet and connect to one of the wallets where your ETH is located
- In this step, in the top field, select the token you want to exchange for another token / in the bottom field, select the token you want.
- You can adjust the amount of your tokens and see how many tokens you receive based on the payment of a certain amount of tokens
- After checking everything, click on Swap
- Now a new window will open for you and the wallet will ask you to confirm the trade. Here you can view the transaction fee and set it. (You must use ETH for transaction fee)
- After confirming the transaction, the processing is done and your tokens are added to your wallet.
Uniswap, as a decentralized Ethereum-based exchange, has made it possible for its users to swap ERC20 tokens. The exchange is also evolving and new features are being added. Uniswap V3 is one of the newest features launched in May 2021. So added features like concentrated liquidity and multiple fee tiers to the platform. Also, despite this amount of available facilities and potential, Uniswap is expected to continue to operate well in the world of cryptocurrencies.