Uniswap is a decentralized finance protocol that is used to exchange cryptocurrencies. Uniswap is also the name of the company that initially built the Uniswap protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts. As of October 2020, Uniswap was estimated to be the largest decentralized exchange and the fourth-largest cryptocurrency exchange overall by daily trading volume. In March 2021, Uniswap was generating fees of approximately US$2–3 million daily for the liquidity providers who facilitate liquid markets for the cryptocurrencies being exchanged.
In addition to that, the Uniswap platform has been a go-to domain for crypto asset enthusiasts, especially people with high interests in decentralized finance (DeFi). The platform offers up-to-date technology and solutions within the DeFi framework.
Features of Uniswap
- Open source
- Variety of coins
- No KYC required
- Safe wallet
Advantages of Uniswap
- Uniswap is totally open source, implying that anybody can reproduce the code to make their decentralized trades.
- Uniswap is likewise tremendously valuable to start-up blockchain ventures that need to promptly deliver their tokens to the market and consider a more extensive potential customer base.
- Whether you need to be a merchant or an LP on Uniswap, the only thing you need to maintain is an upheld Ethereum wallet. This can be a universal Metamask and a wallet address.
- Uniswap is also totally open source, implying that anybody can reproduce the code to make their decentralized trades.
- With Uniswap, there is no need to pay for token or coin listing tax. Users receive the convenience of eliminating difficult verification processes before listing a coin or token for exchanging. So it merits its popularity.
- No registration and no KYC allows for a much quicker setup of your trading environment.
Disadvantages of Uniswap
- Swap feature relies on arbitrage trading to balance the market. Then, the protocol also has a list of fake tokens because it is permission less.
- The gas fees in swapping the token are very high
- It has a relatively high risk as compare to the exchanges. You need to do good risk management and learn more about the governance of this protocol.
Uniswap is a truly decentralized place, anyone can list anything there. This is an indisputable advantage in and by itself. Things quickly evolve in the space of blockchain and cryptocurrency. The advancement of decentralized finance and decentralized exchange are the most useful ones. Not only does it profit investors and financial ventures, it also helps individuals with career offerings.