Smart Contracts are undoubtedly the most exciting tech innovation that has come out in the past few years. People have created a bunch of cool stuff with them, but one of the most compelling creations has to be decentralized crypto exchanges. One such decentralized crypto exchange is called Uniswap.
Uniswap is the world’s first decentralized exchange built on the Ethereum blockchain. The primary purpose behind its creation is to replace all human intermediaries on centralized exchanges with Smart Contracts.
The unique thing about Uniswap is that it is the first exchange that uses an automated market maker instead of a traditional order book.
Order books work in a manner where if one user wants to buy 1 ETH, then the exchange operator tries to find a user willing to sell 1 ETH at the buyer’s desired price.
In contrast, automated market makers have a unique way of operation. There are trading pairs like ETH/USDT that are called pools. Smart Contracts control pools, and when users want to get some ETH for USDT, they trade with the Smart Contract itself. These pools also have liquidity of both cryptos inside them provided by other users of the protocol in exchange for a % of trading fees made with their money.
UNI token is the utility and governance token of the Uniswap ecosystem, allowing users to earn rewards for providing liquidity to automated market makers (AMMs), and gives them the ability to shape the future of the platform.
At the time of writing (May 16th, 2022), UNI’s price is $5. The current Market Cap ranking is #24, with a market cap of $3.4B.
The first half of 2021 was a good year for UNI since it reached its all-time high price of $43 in May. That is a gain of over 9x over its price of $4.7 at the start of the year. The second half of the previous year saw the price be in a constant fall, and the 2022 market correction has only confirmed that by impacting the price, pushing it to a sub $10 mark.
Since its creation, Uniswap has averaged a growth rate of 136.7%.
When Uniswap released the token in September 2020, it used a unique form of distribution in which it “airdropped” 400 UNI tokens to each Ethereum address that had ever used the protocol. Over 250,000 Ethereum addresses received the airdrop, which was worth nearly $1,400 at the time. Airdrops have since become a popular way for DeFi apps to reward longtime users – Uniswap has said it plans to distribute a total of 1 billion UNI over four years.
The tokens will be distributed as follows:
With 1 billion UNI minted in the genesis block, the community will have to earn their 60% allocation by supplying liquidity (or other community initiatives).
Currently, there are 690.8M UNI tokens in circulation.
Uniswap is a synonym when it comes to decentralized exchanges and protocols. With a high supply available and the being most popular DEX, the demand is there.
The primary way people buy their UNI is through centralized exchanges because they offer the ability to purchase them with credit\debit cards, which most people prefer.
Although significantly more complicated, the second way is through decentralized exchanges such as Uniswap itself. Decentralized exchanges usually require users to already have some cryptocurrencies in their wallets to buy other cryptos.
Finally, it can be purchased easily through a broker app such as our Veli App, where you can get your hands on some UNI in just a few taps on the screen.
Uniswap’s creator is the man called Hayden Adams. Hayden is an Ethereum developer. Adams worked on various projects while finalizing Uniswap, and his work was informed directly by Ethereum creator Vitalik Buterin. Buterin even ended up giving the protocol its name.
Uniswap does not have a roadmap, but here are some things that they have recently added.
Uniswap has one of the most vibrant communities in the blockchain space, counting over 1M members across several high-profile social media platforms, with Twitter being their biggest with over 800K members.
Uniswap has been backed by various prominent VCs and companies such as Andreessen Horowitz, Coinbase Ventures, Delphi Digital, ParaFi Capital, Three Arrows Capital, a16z Crypto, and many more.
Uniswap has not faced any legal issues so far.
Uniswap has had a stable network activity for some time now. Let us look at the numbers.
Uniswaps’s biggest competitors are PancakeSwap and SushiSwap.
PancakeSwap is a decentralized exchange that is built on the BNB blockchain. It provides the same services as Uniswap, but the differences are that PancakeSwap has more tokens available for trade, it has more daily active users, and the number of addresses that have CAKE tokens is almost 4x those of UNI tokens.
SushiSwap is a decentralized exchange built on the Ethereum blockchain, just like Uniswap. The main difference is that Uniswap is much more adopted than SushiSwap.
Here are some additional numbers to help illustrate this competition better.
Uniswap | PancakeSwap | SushiSwap | |
Platform | Ethereum | BNB | Ethereum |
Total number of tokens available for trade | 479 | 4213 | 403 |
Market cap | $3.6b | $1.33b | $179.7m |
24h trading volume | $281.7m | $214.2m | $212.4m |
Total value locked in a pool on the platform | $5.5b | $3.62b | $2.31b |
Total number of wallet addresses | 360k+ | 1.2m+ | 150k+ |
Total number of daily active users | 639 | 17.5k | 449 |
Circulating supply of tokens | 69.00% | 39% | 51% |
Launch date | 2018 | 2020 | 2020 |
There are obvious risks associated with investing in crypto, just as there are with any other asset class. Because there are so many distinct types of cryptocurrencies, risks may be categorized into two groups: general risks that apply to all cryptocurrencies and coin-specific risks.
We’ve put up a guide that covers general cryptocurrency investing risks and offers tips on how to mitigate them, while risks particular to individual coins are covered in coin guides such as this one.
Website: https://uniswap.org/blog/uni
Twitter: https://twitter.com/Uniswap
Discord: https://discord.com/invite/FCfyBSbCU5
Reddit: https://www.reddit.com/r/Uniswap
Uniswap was one of the first automated market-making decentralized exchanges. With more than $7b value locked on this exchange, it is undoubtedly one of the biggest decentralized exchanges in the crypto space today.
Ethereum gas fees getting higher could affect the number of users, though. With Layer 2 solutions implemented and new ones coming up, Uniswap could potentially have an answer to this. Also, with Ethereum 2.0 coming, Uniswap could have much higher and broader usage after.
