Exchanges have played an important role in the exchange of such assets in the past few years, one of the growing industry of digital currencies, and without them, an important part of transactions would never have happened. However, the biggest problem and criticism of these exchange platforms can be described as their centralization. For this reason, many developers are looking for ways to solve this problem and have finally managed to create a new concept in the field of digital currency called decentralized exchange; A place that promises users a fully decentralized exchange. Uniswap, a decentralized exchange, is one of the pioneers in the field of digital currency exchange.
Thanks to its innovation and providing digital currency services without the need for authentication (KYC) and registration, this platform has managed to become one of the largest decentralized exchanges in a short period of time. Stay tuned to Digital Currency Signal for more information on UniSwap.
What is UniSwap?
UniSwap is a decentralized digital currency exchange that, unlike centralized exchanges such as Binance and Coinbase, is not controlled by a company or entity, and users are not required to provide the private key of a currency and the exchange. It must be remembered that not providing a private key to an exchange reduces the risk of loss and theft of users’ digital assets if the exchange is hacked. The UniSwap platform is built on the Ethereum blockchain; The network that ranks second among blockchain networks in terms of market size. With the development of the UniSwap exchange on Ethereum, the platform is now compatible with ERC-20 tokens and wallets such as MetaMask and MyEtherWallet. UniSwap is an open source platform. This means that anyone can access the building code of the platform and, in addition to inspecting it, start the same widespread exchange if necessary.
Another factor contributing to UniSwap’s rapid appeal and popularity is the free process of promoting and listing new tokens on this exchange. Generally, for a new token to be listed on centralized exchanges, these exchanges must pay a large fee to provide context for the promotion and supply of these new assets.
History of UniSwap
The UniSwap decentralized platform was created in 2018 by Hayden Adams, a mechanical engineer and former Siemens employee. This exchange was designed to solve some of the biggest problems associated with digital currency exchange, such as centralization and lack of liquidity. One of the successful solutions of this exchange for the issuance of liquidity is the provision of the Automated Liquidity Protocol. After great success and users’ desire to add more options and services, the second version of Uniswap (Uniswap V2) was launched in May 2019. In the second version of UniSwap, users can directly exchange the -all digital assets based on the Ethereum blockchain; Therefore, there was no need to use the Ethereum liquidity pool as an intermediary.
Before the launch of UniSwap, it was not possible to directly exchange an ERC-20 token for another ERC-20 token, or in other words to exchange tokens, and the only way was to exchange them for Ether and then buy the desired token.
Thus, two ERC-20 standard tokens can be directly converted to each other. This feature helped reduce the number of transactions and shipping charges. In addition, such work on the Ethereum blockchain led to congestion and fewer confirmed transactions. The third version of Uniswap (Uniswap V3) was released on May 16, 1400. Changes included in this release include performance optimizations, more control over fees, and more options for accessing liquidity pools.
How does UniSwap work?
This popular site was able to leave the traditional structure of digital currency exchange and completely change the concept of the order book. In general, UniSwap works based on two smart contracts: an exchange contract and a factory contract. These two contracts are actually automatic computer programs that can provide various functions by fulfilling certain conditions of the user.
For example, the factory smart contract is used to add new tokens to the exchange, while the exchange smart contract can be used to trade tokens. Users can use this feature to trade any token based on the ERC-20 standard without the need for an order book. In other words, this protocol eliminates the need for middlemen, resists censorship, and offers higher security than centralized platforms.
By using this method, the buyer and seller do not have to wait to find the other side of the transaction. However, if the pool in question has enough, they can transfer immediately with the specified price. Of course, we should mention that this article happened after the update and release of the second version of the UniSwap platform.
Use the UniSwap exchange
As mentioned before, UniSwap is not a simple exchange, no purchase order or special registration is required. Anyone can add liquidity to a particular UniSwap pair, they can also quickly remove that liquidity from the protocol, making it difficult to exchange tokens. For this reason, it is important to ensure that the liquidity of the currency pairs you intend to trade is locked in. Two main addresses of the UniSwap protocol that you should always type in your browser and know what it is used for. Uniswap. info- This is where you keep track of the information shared. In this section, you can check and search the number of currency pairs separately and monitor things like liquidity, token price, etc.
If you want to start trading or exchange on Uniswap, you can go to Uniswap.exchange and this page has nothing in common with traditional centralized cryptocurrency exchanges. First you need to link your own wallet. You can do this by clicking the Connect to wallet button in the upper right corner or from the window that opens in the middle of the page for exchange. You can start trading as soon as you connect to Uniswap. Note that some tokens may not be in this list, but you can add them manually by pasting the contract address from the Etrascan website. The exchange consists of a series of smart contracts that allow each user to communicate directly with other users of the Ethereum blockchain. This way of working is what we call UniSwap distributed swapping.
✅Conclusion
It should not be forgotten that digital currency exchange is one of the main reasons for the growth of this young sector; Because by providing various services to users and the possibility of quick conversion of these properties, they were able to solve certain problems and provide the possibility of public access to this market. However, decentralized exchanges have been able to present themselves as a new generation of exchanges and have been able to overcome some major problems, including the continuity of power, the existence of middlemen, and the need for buyers and sellers. Meanwhile, UniSwap, as one of the pioneers of this sector, has made great progress in the field of digital currency exchangers and has become one of the largest and most popular decentralized exchanges in a short period of time.
FAQ
What is UniSwap?
UniSwap is a decentralized exchange that uses an automated market maker model for exchanges. Users can trade Coin Ether and ERC20 coins on this token and also earn money by providing liquidity to its package.
How to register on UniSwap Exchange?
Uniswap does not require registration and verification and anyone can trade cryptocurrencies by connecting their wallet to this exchange.
What will the uni swap price be by 2025?
Some analysts predict a price of $23 and others $60 for the UNI token in 2025; But these expectations are based on current market sentiment and are not guaranteed. In addition, the price of Bitcoin is affected by cryptocurrencies, including Uni.
