What is Uniswap (UNI) How it Works & Where To Buy It?

Uniswap is the largest decentralized exchange in the world. UNI token is the governance token of the Uniswap decentralized exchange (DEX).

Uniswap provides users with access to an array of decentralized finance tools such as liquidity pools, staking protocols, and yield farming functionality for users’ crypto assets.

The UNI token is currently the 24th largest cryptocurrency in the world by market cap.

 

How Uniswap (UNI) Works

Uniswap is a decentralized exchange that runs on the Ethereum blockchain. It utilizes an automated market maker and a host of other DeFi tools that make it unique in comparison to centralized exchanges.

The majority of crypto trading takes place on centralized exchanges such as Coinbase or Binance. These exchanges typically require KYC (know your customer) verification before users are allowed to trade cryptocurrencies. These requirements restrict many users around the world, presenting the need for decentralized exchanges which are devoid of these requirements.

Essentially, Uniswap allows any users to easily trade on the platform, and participate in a liquidity pool, staking, and a host of other tools – without providing any form of identification.

The Uniswap protocol is built with decentralization in mind – upholding the true ethos of crypto.

Smart contracts are utilized to optimize accessibility and functionality on the platform. Ethereum (ETH) is also used to pay for transaction fees and interactions with DApps.

Simply put, decentralized exchanges remove boundaries that limit retail investors and open up a world of possibilities to any user.

For example, Uniswap’s liquidity pools incentivize users that participate in liquidity provision – they earn generous rewards for locking up tokens for a certain duration. Users generally participate in Uniswap’s liquidity pools to earn yields from trading fees.

All interactions on Uniswap are also anonymous, linked only to an ETH address. For more information on the Uniswap protocol, users can refer to the Uniswap whitepaper.

 

What Is Uniswap (UNI) Used For?

Uniswap is predominantly used by users seeking attractive yield returns on their tokens. Individuals can become liquidity providers and easily earn tokens in return.

One of the main reasons people opt for DEXes is because they are in full control of their private keys – centralized exchanges are in control of users’ private keys.

This means that anyone can simply connect a digital wallet such as MetaMask or Trust Wallet and start trading on Uniswap, participating in liquidity pools, and many other appealing features.

The common saying crypto goes ‘not your keys, not your coins‘, which refers to how centralized exchanges are actually in control of your coins, and not you.

The Uniswap platform has quickly grown to become the leading decentralized exchange, with daily trading volumes frequently exceeding $1,000,000,000.

The UNI token has also seen significant surges in value and has amassed a market cap of $6,36 billion (the 26th largest cryptocurrency in the world).

 

Where To Buy Uniswap (UNI) Tokens

Uniswap (UNI) has quickly grown to become one of the most traded tokens on the market. It is also the largest decentralized exchange token in the world by market capitalization.

UNI tokens are commonly available and frequently traded on most centralized and decentralized crypto exchanges. Before you’re able to purchase UNI, you’ll need to deposit fiat money onto an exchange, and sequentially UNI tokens will be credited to your UNI digital wallet on the exchange.

The crypto exchanges below are the safest place where you can buy, sell and store UNI tokens.

Five of the most popular crypto exchanges are:

1. Binance
2. Coinbase
3. KuCoin
4. HTX
5. Crypto.com

 

All of the above exchanges allow users to buy, sell, transfer and store UNI tokens in a digital wallet on the exchange. You can use your debit or credit card to purchase UNI tokens on centralized exchanges.

Alternatively, users seeking to use the Uniswap platform can transfer their UNI tokens from a centralized exchange to a digital wallet such as MetaMask.

Once UNI tokens, or any ERC20 tokens, are safely stored in your wallet you can connect your digital wallet to the Uniswap platform, and start participating in the innovative DeFi tools available.

How long has Uniswap (UNI) existed?

Uniswap (v1) was launched on the 2nd of November, 2018. The UNI token was launched in September 2020.

The Uniswap network hit its highest trading volume in March 2021, where daily trading volume surged to more than $7B in a 24h period.

UNI token holders also saw significant price increases in their tokens during this period.

What’s controversial about Uniswap (UNI)?

When researching various decentralized exchanges and their governance tokens, it’s important to do diligent research. UNI, like other decentralized exchange tokens, has been caught up in some notable controversies.

Let’s take a look at the top two controversies surrounding Uniswap (UNI):

• Uncertainty Surrounding How Decentralized Uniswap Is – The entire premise of crypto is based around decentralization and not being able to alter code that’s been written. According to blockchain purists, any project needs to abide by these core principles to be deemed “decentralized”.

  Uniswap seemed to be upholding these principles with integrity, until it announced in 2021, that it would be delisting certain tokens – removing the ability to trade these tokens on the Uniswap platform.

  This sent shock waves through the crypto community because a truly decentralized project/platform wouldn’t facilitate actions of this nature. It would seem evident that there was a centralized body controlling Uniswap.

• SEC Securities Issue – The world’s largest decentralized exchange was caught amidst some controversy when speculations arose regarding a possible SEC investigation into Uniswap.

  The protocol could essentially be facilitating the trading of securities, which would warrant an inquiry from the SEC. Uniswap went on to mention that they seek to comply with regulations wherever necessary.

  Many members of the community were outraged by the statements, with some citing major centralization issues in the so-called ”decentralized” platform.

 

How many UNI tokens are there?

At the time of writing, UNI has a circulating supply of 689,708,325.92 UNI tokens (69% of the total supply).

The total supply of UNI is 1,000,000,000.

The max supply of UNI is 1,000,000,000.

Can UNI be mined?

UNI is not a mineable cryptocurrency in the traditional sense. UNI is a decentralized governance token, and although it’s an ERC20 token, it is unmineable.

UNI tokens can however be earned through liquidity mining. This process involves users participating in liquidity provision on the Uniswap platform – users are rewarded in UNI and other tokens.

Some centralized exchanges also offer rewards for users who lock up/ stake their UNI tokens on the exchange.

What is the market cap of Uniswap (UNI)?

The market cap of Uniswap (UNI) is:

Uniswap (UNI) market cap = total amount of coins in circulation x current market price of UNI

Uniswap (UNI) Market Cap = 689,708,325.92 UNI x $9,09 = $6,26 billion (24th largest market cap)

The recent growth of the Uniswap platform has resulted in the Uniswap governance token seeing an explosive surge in price. The token has extremely performed well and has continued to outperform most other decentralized exchange tokens – it’s currently the largest decentralized exchange token by market capitalization.

The market cap fluctuates according to circulating supply and market price.

 

Biggest Competitors Of Uniswap (UNI)

Decentralized exchanges, like centralized exchanges, predominantly rely on trading fees to bolster profits. This is especially critical for decentralized exchanges that utilize profits to build more utility, increase value proponents and enhance the overall functionality of the platform.

This needs to be prioritized by platforms seeking to drive user adoption and increase trading volumes – platforms that do prioritize this inevitably end up succeeding in the crypto space.

Uniswap has prioritized the abovementioned factors, which has played an integral part in the platform becoming the world-leading decentralized exchange.

However, there are some competitors which are following in Uniswap’s footsteps by creating utility and building tools which benefit their communities.

Some notable competitors of Uniswap and UNI are:

• PancakeSwap (CAKE)
• SushiSwap (SUSHI)
• Serum (SRM)
• 1INCH Network (1INCH)
• 0x (ZRX)

 

What are the future plans for Uniswap and UNI Token?

The automated liquidity protocol allows its users to trade multiple crypto assets which it will continue to facilitate and likely improve on. The success of Uniswap is also dependent on the value proponents it can offer, cheaper transactions, fast transaction finality, and a good user experience.

Going forward, the Uniswap team has announced its intention to keep offering financial products that are beneficial to users – it will likely incorporate even more features and tools that will drive users to the platform.

Pros and Cons of Uniswap and UNI Token

Pros:

• Largest DEX In The World – The Uniswap platform is the largest decentralized exchange. It has amassed more than 1,5 million users, a peak of $7 billion in daily trading volume (March 2021), and a market cap of more than $6 billion (24th largest market cap).
• Anonymity – Users aren’t required to submit sensitive information or provide any form of identification to be able to trade on the Uniswap platform.
• Largest Decentralized Exchange Token – The UNI governance token is the leading decentralized exchange token on the market.

 

Cons:

• Gas Fees Are Exorbitant – Uniswap was built on the Ethereum blockchain which is notorious for its exorbitant gas fees. It is not uncommon for users to pay excessively high transaction fees (ETH) and this is one of the reasons users are opting for cheaper alternatives like PancakeSwap.

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