What is Uniswap (UNI)? And how to use it? 2022

What is Uniswap (UNI)?  And how to use it?  Who made, profit and loss, history!  Difference between Uniswap V1 and Uniswap V2, FAQ NPRBG

 In today’s post, we will tell you what is Uniswap (UNI).  And how to use it?  Who made history?  How to buy and sell?  About the FAQ!  So you must read this post till the end.

What is Uniswap (UNI)?

 Uniswap (UNI) is a digital cryptocurrency exchange, which uses a decentralized network protocol.  Uniswap is the name of the company that initially created the Uniswap protocol.  The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.

 Uniswap is a decentralized finance protocol, used to exchange cryptocurrencies and tokens.  It is provided over blockchain networks, which run open-source software.  This is in contrast to cryptocurrency exchanges, which are run by centralized companies.

The change to the protocol is a native cryptocurrency and governance token called UNI.  It’s voted on by the owners and then implemented by a team of developers.  UNI coins were initially distributed to early users of the protocol.

 Each Ethereum address that interacted with Uniswap prior to September 1, 2020, gained the ability to claim 400 UNI tokens (worth approximately $1,400 at the time).  The market capitalization for the UNI token is over $500 million as of October 2020.

 As of October 2020, Uniswap was estimated to be the largest decentralized exchange and the fourth largest cryptocurrency exchange overall by daily trading volume.

Who created Uniswap?

 Uniswap is created by Hayden Adams, the developer of Ethereum.  This came about as a plan to introduce AMM on Ethereum to a wider audience.

 Adams worked on various projects finalizing Uniswap, and his work was directly informed by Ethereum creator Vitalik Buterin.  Buterin also gave the protocol its name – it was originally known as Unipeg.

Adams has also stated that the original inspiration for the Uniswap platform came from one of Buterin’s own blog posts.  His original idea to focus on Ethereum came after a friend convinced him in 2017 to research and understand the protocol.

How Much Are Uniswap (UNI)?

 Uniswap’s governance token, UNI, has a total supply of 1 billion units.  These will become available over the course of four years, after which the Uniswap network will introduce a “sustainable inflation rate” of 2% to maintain participation.

 As of now, the token distribution consists of the following: – 60% to Uniswap community members, i.e. users, 21.51% to team members, 17.8% to investors, and 0.69% to advisors.  The latter three distributions will take place according to a four-year vesting schedule.

 Of the majority set to go to users, 15% can be claimed by those who used Uniswap before September 1, 2020.  These also include users who submitted transactions that were never successful.  They are eligible for 400 UNI.

The UNI token serves the purpose of enabling shared community ownership in the development and evolution of a decentralized protocol.  It allows UNI holders to participate in the governance of the UNISWAP protocol and the wider ecosystem in a neutral and reliable manner.

 The success and adoption of Uniswap products will have a positive impact on the Uniswap value, so token holders will be encouraged to contribute to the self-sustaining development of the ecosystem.

 A constant inflation rate of 2% per annum will take effect in September 2024, four years after the launch of the UNI token.  This is to ensure that participation in the Uniswap ecosystem continues, by disincentivizing dormant holders.

What is the difference between Uniswap V1 and Uniswap V2?

 Many of the features introduced in Uniswap V2 provide an ERC 20 to ERC 20 token pool like Base Price, and Flash Swap.  Let us know what is the difference between the two versions:-

Uniswap V1

Uniswap V1 always does two transactions.  The first transaction is to swap ERC20 tokens for ETC and the third is to swap back ETH for desired ERC3 tokens.  In other words, the end-user has to pay twice.

On using Uniswap:-

• The fee is higher.

• Eiswap is closely linked to the use of ETH.

• ERC20 tokens cannot be directly swapped with other ERC20 tokens.

 For the above reasons, Uniswap V2 was created.

Uniswap V2

 Uniswap V2 offers 3 different options to swap your tokens, using the “Router Contract”.

 The router contract is aware of all exchange contracts that implement the Uniswap V2 protocol.

There are three swap possibilities here:-

• One is a direct swap between two ERC20 tokens.  For example, two stablecoins like DAI/USDC can be very useful for traders.

• Traditional swaps via ETH, where you have to pay double the fee.

• Voluntary Custom Paths in which, you can build more complex paths like DAI/ETH, ETH/BAT, BAT/USDT, and USDT/USDC, swapping your DAI to USDC.

 Usually, it provides arbitrage opportunities to the trader.

What are the benefits of Uniswap?

 Do you want to know what are the benefits of Uniswap, then you can see some points here:-

• Low Fees:-

 Uniswap charges only 0.30% per transaction.  It is much cheaper than most decentralized exchanges.  Have they mentioned that it can be reduced to 0.25% in the future?

• No KYC:-

 There is no need to go through the KYC process (declare your full name, or your identity card will be kept confidential).  This allows you to trade on the exchange faster, and if the exchange gets hacked, the information will not fall into the wrong hands.

• Self-management of assets:- 

You have complete control over your money.  This avoids the risks associated with decentralized exchanges, where you can lose money if the exchange goes bankrupt or is hacked.

• Opportunities to access new coins/tokens:- 

One thing you often encounter in centralized exchanges.  That is: some crypto projects will have to go through a moderation process with the listed coin/token exchange.

 On Uniswap, users can get these new tokens first.  And with the huge fluctuations in token price, especially when they first launch.

What are the disadvantages of Uniswap?

Uniswap has advantages, then it also has disadvantages, which you can see here some points:-

• Fake Smart Contract:-

 Fake projects smart contracts, and fake real contracts, are one of the biggest problems of Uniswap because anyone can create ERC20 tokens and add them to Uniswap.

 The problem with this is that as soon as the large liquidity provider makes a decision, it can withdraw the liquidity of the pool, leaving other users at a loss.

 So there are people who took advantage of this on Uniswap with the aim of enticing people to send their money to these people in exchange for scam coins.  Users should be very careful in this regard.

• Transaction Failed:-

 Transactions on Uniswap will not be 100% fully successful, making transactions still run the risk of failure.  It is affected by many factors.  like:-

 You pay very little.  Such as the reason for the transaction taking longer than the time fixed for the fee.

 The price jumps to the maximum price you want to pay for that token before the transaction is completed.

 Finally, despite the liquidity creation protocol, sometimes there is not enough liquidity in the pool at Uniswap.

 Many of the above factors affect why your transaction fails, but rest assured, you will be refunded, and hence you will not lose money.  So case number two is better.

• fee gas:-

 Since writing this article, Ethereum gas fees have skyrocketed due to the massive amount of network usage: network congestion at 97%.

 This is very expensive using Uniswap, as a single token transaction can go up to $20 (depending on).  With Uniswap, you have to approve every new token you want to swap and it also charges fees of up to $2.

• phishing attacks:- 

 Self-impersonation sites are Uniswap.  The domains in this guide are the only 2 legitimate domains you should be using, everything else is original Uniswap and potentially no scam.

History of Uniswap (UNI)

 Uniswap was created on November 2, 2018, by Hayden Adams, a former mechanical engineer at Siemens.

 The Uniswap Company received investments from venture capital firms including Andreessen Horowitz, Paradigm Venture Capital, Union Square Ventures LLC, and ParaFi.  Uniswap’s average daily trading volume was US$220 million in October 2020.  Traders and investors use Uniswap because of its use in decentralized finance (DeFi).

 The first version (V1) of the Uniswap protocol was published in November 2018 as a proof-of-concept for AMMs (automated market makers).  Version 2 was launched in May 2020, and Version 3 was launched in May 2021, introducing new options for allocating liquidity within a fixed price range.

 In April 2020, Uniswap’s website was temporarily removed [quantify] after hackers unsuccessfully attempted to use a re-entry hack on the exchange.

Uniswap (UNI) FAQ

Here you can read some questions and answers related to Uniswap (UNI):-

Q1.:- What is Uniswap (UNI)?

Uniswap (UNI) is a digital cryptocurrency exchange, which uses a decentralized network protocol.

Q2.:- Who created Uniswap?

Uniswap is created by Hayden Adams, the developer of Ethereum.  This came about as a plan to introduce AMM on Ethereum to a wider audience.

Tags:- Uniswap, Uniswap price, Uniswap price history, Uniswap token, Uniswap CoinMarketCap, UNI token, What is Uniswap coin, Is Uniswap safe, Uniswap v2, Uniswap V1, Uniswap V3