Uniswap is a revolutionary decentralized trading protocol that facilitates automated trading of decentralized finance (DeFi) tokens.
Overview
Launched in November 2018, Uniswap has become the largest decentralized exchange (DEX) by trading volume. It operates on the Ethereum blockchain and enables users to trade tokens without the need for intermediaries.
Key Features
- Automated Market Making (AMM): Uses smart contracts to create liquidity pools and determine prices automatically
- Permissionless: Anyone can list tokens or provide liquidity
- Non-Custodial: Users maintain control of their funds at all times
- Open Source: Code is publicly available and auditable
The UNI Token
UNI is Uniswap's governance token, launched in September 2020. It allows holders to participate in the protocol's governance by voting on proposals that affect the platform's development.
Protocol Versions
V1
The original version that introduced the concept of automated market making to Ethereum.
V2
Added support for any ERC20/ERC20 pairs and flash swaps.
V3
Introduced concentrated liquidity and multiple fee tiers.
Impact on DeFi
Uniswap has revolutionized decentralized trading by:
- Eliminating the need for order books
- Providing constant liquidity for trading pairs
- Enabling permissionless token listings
- Creating new opportunities for passive income through liquidity provision