A Look at Uniswap  

Scott Keisler

Altcoins 3 years ago
1 QCP
Uniswap is basically an open source exchange that offers a wide variety of crypto assets. The exchange runs on the Ethereum blockchain and utilizes smart contracts. (A smart contract is a transaction protocol that executes only when certain conditions - that are programmed into the protocol - are met.) But as a decentralized finance (DeFi) project the exchange has no central management or administration.

Kraken describes it this way:

Rather than maintaining a central order book where buyers and sellers can place orders, Uniswap instead uses a collection of liquidity pools.

The platform relies on users to contribute to the liquidity pools and in exchange for doing so users receive a portion of trading fees plus newly minted UNI, which is the native cryptocurrency on the exchange.

Kraken explains again:

Liquidity providers contribute to Uniswap pools by first locking two assets into a smart contract. For example, Uniswap’s DAI/ETH liquidity pool consists of equal values of DAI and ETH deposits. Uniswap uses Ethereum so this means that it does not list tokens that trade on other blockchains.

One of Uniswap's biggest competitors is Pancake Swap, which is a very similar concept running on the Binance Smart Chain. In fact a few weeks ago Pancake actually 'flipped' Uniswap becoming the largest DeFi Exchange (DEX) by volume. (SushiSwap is another top DEX competitor and Aave and Compound are also considered 'blue chip' DeFi Tokens by many.)

Perhaps the biggest obstacle right now for Uniswap is the Ethereum gas fee, which is one of the main reasons why Pancake Swap has gained so much ground.

However on March 23rd Uniswap announced the release of Version 3 (V3). The build up to the release generated excitement, leading to a new all-time high with a price over $35 on March 31st. However at the time of this writing this has dropped back down to the $28 range.

Currently Uniswap is the DEX top dog in terms of Market Capitalization ( just under $14.8B) but according to Coin Gecko Pancake Swap has a slight lead in the 24 hour trading volume category (at the time of this writing):

Pancake Swap $971,039,433

Uniswap $968,021,657

Uniswap offers over 1,800 coins including Uniswap, DAI, 1Inch, BAT, Chainlink, Compound, Ether, Gemeni Dollar, NuCypher, Numeraire, Tether and USDCoin. To get started with Uniswap you need an ERC-20 (Ethereum) supported wallet such as Atomic, Coinbase wallet, MetaMask, Trust etc..

Gas fees are a big cloud hanging over the head of everything Ethereum right now. At some point we are confident this issue will be addressed adequately but the question is how much market share will be gobbled up by competitors in the interim?

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  • Smart Contracts
  • DeFi
  • DEX
  • Decentralized exchange
  • Uniswap