Uniswap information

What is Uniswap?

Uniswap is a decentralized cryptocurrency exchange that uses a set of smart contracts to create liquidity pools for executing trades. It is an open-source project and falls under the category of DeFi products (Decentralized Finance), as it uses smart contracts to facilitate transactions instead of a centralized exchange. The protocol enables automated transactions between cryptocurrency tokens on the Ethereum blockchain via smart contracts. As of 2024, Uniswap is estimated to be the second-largest decentralized exchange and the seventh-largest cryptocurrency exchange overall based on daily trading volume.

Whitepaper: Uniswap Whitepaper

How does Uniswap work?

Uniswap operates as an automated market maker and uses liquidity pools to execute orders rather than relying on traditional market makers, aiming to create more efficient markets. Individuals and bots, known as "liquidity providers," supply liquidity to the exchange by depositing a pair of tokens into a smart contract that others can buy and sell from, based on the constant product formula φ(x, y) = xy. In return, liquidity providers receive a share of the trading fees earned on that pair. With each trade, a certain amount of one token is removed from the pool in exchange for another, which changes the price. There are no listing fees for tokens, allowing access to a wide range of Ethereum tokens, and no registration is required for users. As open-source software, Uniswap’s code can also be forked to create new exchanges.

The token

Ticker: UNI

Category: Governance Token

Blockchain: Ethereum

Protocol: ERC-20

Year of launch: 2020

The technology behind Uniswap

Uniswap is based on smart contracts running on the Ethereum blockchain. The protocol uses a constant product formula to determine prices and execute trades. With the launch of Uniswap v3 in May 2021, new features were introduced, such as concentrated liquidity, allowing liquidity providers to allocate capital within specific price ranges—significantly improving capital efficiency.

The Uniswap ecosystem

The Uniswap ecosystem includes a range of products and services:

• Uniswap Interface: A web application allowing users to swap tokens and provide liquidity on the Uniswap protocol.
• Uniswap Wallet: A browser extension and mobile app enabling users to swap, send, and receive crypto across multiple chains.
• Uniswap Labs: The software company behind the development of the Uniswap protocol and related products.

Who founded Uniswap?

Uniswap was founded on November 2, 2018, by Hayden Adams, a former mechanical engineer at Siemens. Adams is the founder and CEO of Uniswap Labs, the company behind the development of the Uniswap protocol—a decentralized exchange (DEX) built on the Ethereum blockchain. He launched Uniswap in November 2018 after being inspired by a blog post written by Vitalik Buterin, co-founder of Ethereum. His goal was to create a decentralized platform for token exchange without relying on centralized exchanges.

Impact on the environment

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