Uniswap Exchange – Buy & Sell Cryptocurrency| Uniswap

The finance industry has been functioning with centralized exchanges for a very long time. Even when it comes to cryptocurrencies, the underlying models facilitating the functioning work in a centralized model. Although most people are familiar with the centralized models, many have also been the victims of its drawbacks and are now in search of decentralized models where they don’t have to trust a third party with their finances.

This is where Decentralized Finance (DeFi) comes into the picture. As the name suggests, decentralized finance is a way to conduct financial procedures in a decentralized manner, i.e., without any central authorities. There have been many projects to implement the concept in reality, such as decentralized exchanges. Decentralized exchange platforms are the platforms for cryptocurrency Uniswap Exchange, which do not require the users to deposit any funds to begin trading, as users can directly trade from their own wallets to make transactions. Hence, it facilitates peer-to-peer (P2P) transactions. Also known as DEXs, there are numerous decentralized exchange platforms that aim to provide the most secure and efficient DeFi services. One such platform is Uniswap Exchange. Listing tokens on Uniswap is not very difficult but still requires some technical expertise.

Uniswap is a decentralized finance protocol that is used to exchange cryptocurrencies. Uniswap is also the name of the company that initially built the Uniswap protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. Uniswap is trading on 107 cryptocurrency exchanges across 199 trading pairs. The most popular Uniswap Exchange pair is UNI/USDT on Binance Futures, where it has a trading volume of $ 88.31M. You can trade Uniswap with many fiat currencies including EUR, USD, KRW, GBP, IDR and many stablecoins such as USDT, HUSD, BUSD, USDC, DAI.

What is Uniswap?

Uniswap is a protocol on Ethereum for swapping ERC20 tokens. Unlike most exchanges, which are designed to take fees, Uniswap is designed to function as a public good—a tool for the community to trade tokens without platform fees or middlemen. Also unlike most exchanges, which match buyers and sellers to determine prices and execute trades, Uniswap Exchange uses a simple math equation and pools of tokens and ETH to do the same job.

What’s so special about Uniswap?

Uniswap’s main distinction from other decentralized exchanges is the use of a pricing mechanism called the “Constant Product Market Maker Model.”

Any token can be added to Uniswap by funding it with an equivalent value of ETH and the ERC20 token being traded. For example, if you wanted to make an exchange for an altcoin called Durian Token, you would launch a new Uniswap Exchange smart contract for Durian Token and create a liquidity pool with–for example–$10 worth of Durian Token and $10 worth of ETH.

Where Uniswap differs is that instead of connecting buyers and sellers to determine the price of Durian Token, Uniswap uses a constant equation: x * y = k.

What else is different about Uniswap?

Absolutely any ERC20 token can be listed on Uniswap Exchange –no permission required. Each token has its own smart contract and liquidity pool–if one doesn’t exist, it can be created easily.

Once a token has its own exchange smart contract and liquidity pool, anyone can trade the token or contribute to the liquidity pool while earning a liquidity provider fee of 0.3%. To contribute to a liquidity pool, you need an equal value of ETH and ERC20 tokens.

How are Uniswap tokens produced?

Whenever new ETH/ERC20 tokens are contributed to a Uniswap Exchange liquidity pool, the contributor receives a “pool token”, which is also an ERC20 token.

Pool tokens are created whenever funds are deposited into the pool and as an ERC20 token, pool tokens can be freely exchanged, moved, and used in other dapps. When funds are reclaimed, the pool tokens are burned or destroyed. Each pool token represents a user’s share of the pool’s total assets and share of the pool’s 0.3% trading fee.

How to make your first trade on Uniswap Exchange

Through Uniswap, you’re able to purchase ether (ETH) and any of the thousands of ERC20 tokens supported by the platform.

To do this, you’re going to need some ETH in your balance to pay for any transaction fees, as well as something to trade for the ERC20 token you want. This might be ETH, or another ERC20 token. For example, if you’re looking to trade USD Coin (USDC) for UNI, you’re going to need to hold USDC in your wallet plus some ether to cover the transaction fee.

Conclusion

The most popular cryptocurrency exchanges listing Uniswap Exchange are Binance, Kucoin, Huobi Global and Kraken. There are many other crypto exchanges where you can trade Uniswap, but make sure to do your own research before making your choice. You can find all cryptocurrency exchanges here. Also, make sure to check out our cryptocurrency exchange reviews.

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