What is the difference between Uniswap and Ethereum
Ethereum and Uniswap both run on the Ethereum blockchain but have been designed with different purposes in mind.
Ethereum, as well as being a cryptocurrency for a means of exchange, allows smart contract platforms to be built using its technology. Uniswap makes use of Ethereum’s smart contracts by creating automated market maker liquidity pools so ERC-20 tokens can be exchanged via its DEX (decentralised exchange). Uniswap is also an ERC-20 token — this means it has been built on the Ethereum blockchain and does not have its own blockchain and must follow certain rules set out by Ethereum. The advantage of this is providing a standard framework for other projects and tokens looking to build apps on Ethereum, saving time for developers and shoring up projects with Ethereum’s security features The disadvantage of building apps on top of an already congested network is higher gas fees on the Ethereum network.
Uniswap’s token (UNI) is used for governance voting rights on making changes to the protocol. Ethereum (ETH) on the other hand is more similar to Bitcoin — it can be used as a means of exchange but is also the currency used to pay for network and miner fees across the whole network. To complete trades using Uniswap’s DEX, users must hold Ethereum to pay for transactions and gas fees. With this in mind, the differences between the two tokens can be thought of as Ethereum being the main trunk of the tree, while Uniswap makes up one of its branches.