- Uniswap is Ethereum’s most popular decentralized exchange.
- In addition to trading cryptocurrencies, users can stake their holdings in liquidity pools and vote on governance decisions.
- The exchange uses the UNI token for its governance model.
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Uniswap is a decentralized exchange (DEX). It allows users to swap various Ethereum-based ERC-20 tokens from a simple web interface, as shown in the image below.
Uniswap is currently the most popular DEX. It has $2.1 billion secured in its contracts as of October 2020, which accounts for 20% of all value locked in DeFi apps. It also has a daily trading volume of $263 million, which makes up about 95% of all DEX trading.
Finally, it is the most popular DEX by usership, with 38,000 daily users.
This article focuses on Uniswap v2, which handles the vast majority of Uniswap trading and offers specific features. However, it should be noted that Uniswap v1 is still operational.
What Features Does Uniswap Offer?
As a DEX, Uniswap is more decentralized and, therefore, more flexible than many other exchanges for various reasons.
Any Ethereum-based token can be traded: The protocol does not have a listing process, nor does it charge listing fees. Instead, users stake their tokens in liquidity pools, which determines which tokens are listed. In Uniswap v2, liquidity providers can combine any two ERC-20 tokens into a trading pair without the need to use ETH itself.
Of course, not every possible trading pair is available, but Uniswap’s coverage is impressive. It offers over 2,000 trading pairs, according to CoinGecko, surpassing every other exchange.
Funds are not held in custody: Uniswap itself does not hold user funds; instead, funds are controlled entirely by smart contracts. These contracts handle every aspect of…