Uniswap protocol and Uniswap interface are developed by Uniswap Lab. The Uniswap protocol is an open source protocol for providing liquidity and trading ERC20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent collection, thereby enabling secure, accessible and efficient exchange activities. The protocol is non-escalable and designed to resist censorship.
Uniswap is a decentralized transaction protocol based on Ethereum blockchain, which can provide unmanaged transactions of ERC-20 tokens. Its first version (Uniswap v1) has been running since november2018 (released on DevCon 4), while its second version (Uniswap V2) was released in may 2020.
How does Uniswap (UNI) Work?
Uniswap is an automation market maker. In fact, it is a set of smart contracts that define standard methods for creating liquidity pools, providing liquidity, and exchanging assets.
Each liquidity pool contains two types of assets. Pools track total liquidity reserves and predefined pricing policies set by liquidity providers. Reserves and prices are automatically updated each time someone trades. There is no central order book, no third-party trust, and no private order matching engine.
Since the reserve is automatically rebalanced after each transaction, the Uniswap pool can always be used to buy and sell tokens - unlike traditional exchanges, traders do not need to match a single counterparty to complete transactions.
UNI, as the native token of Uniswap, is the ERC-20 governance token on the Ethereum blockchain. The token holder makes decisions on the governance of the Uniswap protocol, the community funds of the UNI token, the protocol fee conversion (if activated, 0.05% of the fee will be charged by the UNI token holder), eth ENS, the default token list of Uniswap (tokens.uniswap.eth) and SOCKS liquidity tokens.
What is Uniswap (UNI)？
Uniswap is an Ethereum-based protocol designed to facilitate automatic exchange transactions between ETH and ERC2 token digital assets and automatically provide liquidity on Ethereum. Uniswap is fully deployed on the chain. Any individual user can use this protocol as long as the decentralized wallet software is installed. Uniswap attempts to use the decentralization protocol to completely disintermediate the digital asset transaction process.
Uniswap is built on a unique system called automated market maker (AMM). Its core is a pool of two ERC-20 tokens to create liquidity. As a reward for the liquidity clause, the parties (liquidity providers or LPs) collect the exchange fee incurred whenever an individual exchanges tokens. In Uniswap V2, the exchange fee is set to 0.30% of the nominal transaction volume. The fees collected are allocated to the pool's reserves. After the agreement switch is turned on, UNI holders will charge 0.05% of the handling fee for each transaction, and the reward of liquidity providers will be reduced to 0.25%.
Although it is not the first AMM, Uniswap is still popularizing automated market maker agreements, resulting in competitive agreements such as SushiSwap that rely on its audited open source code.
Uniswap (UNI) Crypto Wallet
In addition to placing UNI in the Gate.io exchange to facilitate trading, UNI can also be placed in the crypto wallet.
To start trading tokens in the Uniswap application, you first need to get an Ethereum wallet and get some tokens.
The Uniswap application supports the exchange of any token for another. However, if you are new to Ethereum, you need to use the legal tender in your bank account or credit card to buy your first token. This "legal entry" experience is not supported by Uniswap applications, but many popular crypto services can help you do this.
Although you can trade almost any ERC-20 token on the Uniswap application, your wallet must hold ETH to execute transactions. This is because all transactions on the Ethereum network must pay the gas fee to the miner who performs the calculation. Gasoline must be paid in ETH, so you must have enough ETH in your wallet to cover the cost of the Uniswap transaction.
After purchasing ETH, you can send it to your wallet and return https://app.uniswap.org/
to start trading.