Get to know more about Uniswap
By: Archidax Exchange
Tags: Cryptocurrency News, Uniswap, Cryptocurrency Investment, Cryptocurrency, Crypto

What is Uniswap?

Uniswap is an open-source decentralized exchange (DEX) platform built on the Ethereum network and allows buyers or sellers to exchange ERC-20 tokens without having to use another protocol. Uniswap can be called Automated Liquidity Protocol where there is no Order Book or centralized party to trade.

However, how can trading occur without an order book? Uniswap works with a model that requires liquidity providers to create liquidity pools. This system provides a decentralized pricing mechanism that essentially smooths out the depth of the order book. For now, the important thing to note is that users can swap ERC-20 tokens seamlessly without the need for an order book.

Since the Uniswap protocol is decentralized, there is no listing process. In essence, ERC-20 tokens can be launched as long as there is a liquidity pool available to traders. As a result, Uniswap does not charge a listing fee. In another sense, the Uniswap protocol acts as a kind of public good.

Who was created and founded Uniswap (UNI)?

The Uniswap protocol was created by Hayden Adams in 2018. However, the underlying technology that inspired its implementation was first introduced by Ethereum co-founder Vitalik Buterin.

How Uniswap Works?

Because it does not have an order book, Uniswap abandons the traditional architecture of digital exchanges. This protocol works with a design called Constant Product Market Maker, which is a variant of the model known as Automated Market Maker (AMM) or automated market maker.

Automated market makers are smart contracts that have liquidity reserves (or liquidity pools) that traders can trade in pairs. These reserves are funded by liquidity providers. Anyone can become a liquidity provider depositing the equivalent value of two tokens in the pool. Instead, traders pay a fee to the pool which is then distributed to liquidity providers according to their share of the pool.

Liquidity providers create markets by depositing the equivalent value of two tokens. This deposit can be ETH and an ERC-20 token or two ERC-20 tokens. This pool is generally made up of stablecoins, such as DAI, USDC, or USDT, but this is not a requirement. In exchange, liquidity providers get “liquidity tokens” which can be redeemed and represent their share of the entire liquidity pool.

Uniswap Token (UNI)

UNI is the original token of the Uniswap protocol which grants governance rights to its owner. This means that UNI owners can vote for changes to the protocol. We discussed earlier that protocols function like some kind of public good. The UNI token reinforces this idea.

1 billion UNI tokens have been minted in the beginning. 60% of it is distributed to existing members of the Uniswap community, while 40% will be available to team members, investors, and advisors for four years.

Part of the distribution to the community occurs through mining liquidity. That is, UNI will be distributed to people who provide liquidity to the following Uniswap pools:

• ETH/USDT

• ETH/USDC

• ETH/DAI

• ETH/WBTC

How to get Uniswap?

To buy and sell TRX can be done at an exchanger. Archidax is the best exchange platform to buy, sell, trade, and store TRX easily.

Source : f.a.s