What is Uniswap?
Uniswap is the world’s largest peer-to-peer cryptocurrency exchange. Uniswap allows anyone with an Ethereum wallet to swap tokens directly, which is why it’s often also referred to as decentralised. There are currently hundreds of tokens available on Uniswap. New tokens can take a long time to be verified and listed on large exchanges, but because Uniswap is decentralised and anyone can access it, Uniswap offers a lot of new and less well-known tokens too.
This is possible because transactions between the parties involved in the swap are facilitated by smart contracts, which are contracts that are carried out automatically by a computer program when conditions both parties agree on are met. This is different to a cryptocurrency platform like Luno, which uses an order book to help facilitate trades.
Uniswap also doesn’t hold any assets on behalf of its customers. Instead, it uses what’s known as ‘liquidity pools’. These are created by crypto holders, who lend their assets to the liquidity pool there is enough of the tokens available when customers come to the platform for people to buy and sell. In exchange, they get a share of Uniswap’s trading fees.
UNI is the native token of Uniswap. Anyone holding UNI can have a say in how Uniswap is run. UNI is an ERC-20 token that’s built on Ethereum.