Uniswap is an Ethereum-funded project that acts as an alternative to a regulated exchange (CEX). The protocol allows you to trade ETH and other ERC-20 coins without using an order book. After reading the Uniswap cryptocurrency review, the investor will be able to understand what is its uniqueness and whether it is suitable for short-term as well as long-term investments.
History of Uniswap (UNI)
The idea to launch an automated market maker (AMM) based on the Ethereum blockchain, which would generate pools of liquidity for trading tokens, belongs to the developer Hayden Adams.
He received his bachelor’s degree in engineering from Stony Brook University and worked as a mechanical trainee for Vista Wearable Inc. and engineer at Siemens.
The programmer became interested in blockchain in 2017 thanks to the advice of a friend, Carl Flersch, who was a developer at the Ethereum Foundation. After 2 months of learning Solidity (the most popular language for deploying smart contracts) and JavaScript, he decided to create his own DeFi decentralized finance tool, the Uniswap crypto exchange.
The development of the decentralized exchange involved the programmer Kallil Capuozzo, who worked at Google and Microsoft, Andy Milenius, Philip Dayan and other specialists.
The most important stages of creation:
- March 2018 A demo version of the protocol is presented.
- November 2, 2018 DEX launched. The platform did not have its own token, there were no transaction fees, and the listing of new coins was also free.
- April 2019 Paradigm fundraiser raised over $1 million for the project, which was needed to upgrade the protocol.
- April 2020 Top crypto company Coinbase invested 1 million stablecoins in the USDC/ETH DEX liquidity pool.
- May 2020 The second, updated, version of the V2 protocol has been released with improved technical characteristics.
- July 2020 The exchange confirmed leadership among other DEXs. According to Dune Analytics, 37.2% of all trades on decentralized platforms were carried out through it. The Block information resource reported that the site is leading in terms of the number of cryptocurrencies (2810), having overtaken the competitor IDEX (1184 coins) by a wide margin.
- August 2020 SushiSwap hard forked, creating a new chain. Feature: the presence of its native management token, traded under the ticker SUSHI. Free distribution has been made.
Investors could immediately move liquidity tokens from the original blockchain to the new one and receive income. Therefore, many transferred their coins from Uniswap (about 70%). However, as the distribution decreased, Sushi’s liquidity fell, and depositors returned.
- September 16, 2020 To regain leadership in the DEX space, a native native UNI token was created to govern the network. It provided joint ownership of the system and the community, provided a tool for voting on protocol updates. Thanks to this move, trading volume exceeded $425 million and allowed DEX to overtake even Coinbase.
1 billion units of the UNI cryptocurrency were immediately generated. The number and terms of distribution are given in the table:
Cryptocurrency Features
Uniswap is a 100% open automated peer-to-peer protocol developed on the Ethereum blockchain for exchanging cryptocurrencies. It is a set of immutable smart contracts and is based on the following principles:
- Opposition to censorship.
- Increased security.
- Self-service and work without intermediaries that could restrict access.
In essence, Uniswap is a non-custodial DEX exchange. Users retain full control over assets and accounts. This is the fundamental difference from the centralized CEX sites.
The developers abandoned the classic order book model. They began to combine tokens into smart contracts and create liquidity pools.
Thanks to the platform, programmers, traders, liquidity providers (investors who provide tokens to support fast sales) get access to an open financial market. They can quickly exchange Ether and other ERC-20 coins that are generated on the Ethereum blockchain.
The functionality of DEX expanded as updates were introduced. Details are shown in the table:
What is Uniswap in simple words
The decentralized exchange has its own Uniswap cryptocurrency. This is a native token generated on the Ethereum blockchain. Its standard: ERC-20. His contract address is 0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984. The coin is split up to 18 decimal places.
Characteristics
Uniswap (UNI) is a popular coin that is in the top 25 by capitalization. The number of holders in August 2021 was 264,914. At the moment, over 2.9 million transactions have been completed. Basic characteristics are presented in the table:
| OPTIONS FOR AUGUST 2021 | COMMENT |
|---|---|
| Rating on CoinMarketCap | #16 |
| Market capitalization | $17.7+ billion |
| The number of coins that circulate in the market | 611,597,887.43 (61%) |
| Minimum exchange rate for all time | $0.419 (Sep 17, 2020) |
| Maximum price for the entire period | $44.97 (May 3, 2021) |
Security
The Uniswap crypto is not pegged to the dollar, euro or other fiat currencies. It is also not backed by gold, natural resources, or company stocks. At the same time, the coin underlies the largest DEX, it is supported by popular exchanges, the Ethereum blockchain platform and thousands of crypto investors. The limited emission mechanism also provides the prerequisites for a gradual increase in the rate, making the coin attractive for investment.
Usage
Management assets allow users to influence the development of the community. When voting, it is necessary to gain a sufficient quorum for a decision to be made. Token holders receive the rights to the following actions:
- Protocol management.
- Community Treasury. That is, participation in decision-making on the distribution of coins to finance various initiatives.
- Changing commissions and adding new ones.
- Ownership of liquidity tokens.
- Working with Ether Name Service.
- Changing the list of tokens that are added to the system by default.
Initially, the following parameters were set: in order to submit a management proposal, you need to have from 1% of the total supply of coins, 4% is necessary for voting (so that a quorum is reached). The acceptance/rejection period was 7 days, with a 2-day delay prior to execution.
Where to buy Uniswap
It is better to conclude deals on popular exchanges. The most convenient DEX project platform. However, it is also possible to trade on popular centralized exchanges with large capitalization and a good reputation.