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What is UNISWAP?



 

Today, we are proud to announce that UNI has become our latest addition to our predicted assets. In this article, we will explain what UNISWAP is and why we decided to predict its governance token (UNI).

 

What is a UNISWAP?

UNISWAP open-source platform was built in 2018 on top of the Ethereum blockchain

 

A game-changer

Solves the liquidity problem

While other crypto money markets rely on centralized controls or administrators, as well as order book systems to connect buyers and sellers, Uniswap stands out by providing users with a completely decentralized trading platform that tackles the industry's common liquidity issues. Users deposit their crypto assets into collectivized fund pools (each type of cryptocurrency supported by the Uniswap platform has its own pool), and trading prices are established according to an algorithm. Buyers and sellers don't have to wait for a corresponding party to begin a transaction using Uniswap's liquidity pool system: liquidity providers deposit assets into pools, and buyers and sellers may trade against these collective pools.

 

Uniswap uses an automated liquidity protocol to tackle the liquidity problem of centralized exchanges. This operates by encouraging traders to become liquidity providers (LPs) on the exchange: Users of the Uniswap platform pool their funds to form a fund that is used to perform all deals on the site. Each token mentioned has its own pool to which users can contribute, and the prices for each token are decided by a computer-based math process (described in “How token values are established,” below). A buyer or seller does not have to wait for the opposite party to emerge in order to conclude a transaction using this method. Instead, they may execute any deal instantaneously at a known price as long as the pool has enough liquidity to support it.

 

Each LP receives a token that symbolizes their staked commitment to the pool in return for putting up their cash. For example, if you contributed $10,000 to a liquidity pool with a total value of $100,000, you would get a token representing 10% of the pool's value. This token can be exchanged for a portion of the trading commissions. Every trade that takes place on the platform is charged a fixed 0.30 percent fee by Uniswap, and it is instantly sent to a liquidity provider. Whenever a liquidity provider decides they want to exit, they receive a portion of the total fees from the reserve relative to their staked amount in that pool. The token they received which keeps a record of what stake they’re owed is then destroyed.

 

As a result of this innovation, Uniswap has become one of the most successful projects that’s part of the Decentralized Finance (DeFi) movement.

Pioneer of The Automated Market Maker Concept

Uniswap was the first to introduce the Automated Market Maker idea, in which users contribute Ethereum tokens to Uniswap's "liquidity pools," and algorithms determine market pricing based on supply and demand (as opposed to ordering books, which match bids and requests on a controlled exchange like Coinbase).

By supplying tokens to Uniswap liquidity pools, users may receive rewards while promoting peer-to-peer trading. Anyone, from any location, may contribute tokens to liquidity pools, trade tokens, or even create and list their own (using Ethereum's ERC-20 protocol).

The project shares the same value of PECULIUM: Simplicity through innovation and seamless experience. We will analyze why it is worth investing in UNI.

Swap Feature

UNISWAP’s swap feature authorizes users to swap between Ethereum (ETH) and different ERC-20 tokens. Token swaps are one of the easiest ways on UNISWAP to trade one ERC-20 token for another. Interestingly, swaps in UNISWAP are different from trades on traditional platforms. UNISWAP does not use any order book for liquidity or to manage prices. It uses an automated market maker mechanism to provide instant feedback on rates and slippage. 

 

Flexibility of UNI

 
Ease of use  

Anyone can exchange any ERC token in a few clicks without going through a KYC process. UNISWAP makes it super easy to swap an ERC-20 token with another ERC-20 token with a few clicks by connecting MetaMask or other compatible wallets to the exchange.


Any Ethereum-based token can be traded

The protocol does not have a listing process, nor does it charge listing fees. Instead, users stake their tokens in liquidity pools, which determine which tokens are listed. 

Funds are not held in custody

UNISWAP itself does not hold user funds; instead, funds are controlled entirely by smart contracts. 

No centralized order book

UNISWAP does not use an order book to determine prices. Instead, it uses formulas based on token ratios in its various liquidity pools. 

Anyone can provide liquidity

Investors can earn revenue from UNISWAP fees by staking their tokens in UNISWAP liquidity pools

UNI Token

The native token of Uniswaps, UNI, grants its holders governance powers (right to vote on new developments and changes to the platform, including how minted tokens should be distributed to the community and developers as well as any changes to fee structures). The UNI coin was developed in September 2020 to prevent consumers from switching to DEX SushiSwap, a competitor. SushiSwap, a fork of Uniswap, has enticed Uniswap customers to enable SushiSwap to reallocate their cash to the new platform by paying them with SUSHI tokens a month before UNI tokens launched. This was a new type of token that gave users governance rights over the new protocol as well as a proportionate amount of all transaction fees paid to the platform.

Uniswap responded by creating 1 billion UNI tokens and decided to distribute 150 million of them to anybody who had ever used the platform. Each person received 400 UNI tokens, which at the time amounted to over $1,000.

UNI Token is the tenth-largest digital asset, many crypto experts believe that UNISWAP is a good investment when compared to other Defi coins and mainstream cryptocurrencies. 

 

Market cap 

UNISWAP (UNI) is one of the most talked-about cryptocurrencies of 2021. This crypto is climbing very quickly as it currently sits just outside the top 10, with a market cap of over $11 billion. The total number of new UNISWAP addresses per 7-day Moving average is around 118.887. This data is indicative of the growing number of both retail and institutional investors stacking up on the token built as an ERC-20 asset atop the Ethereum blockchain. According to Defi Pulse, UNISWAP is one of the top leaders in the decentralized exchange category as it holds over $3.7 billion in locked assets. UNISWAP has increased significantly since the start of 2021. Having returned 588.02% (as of July 2021), UNI has recovered from the lows that followed new all-time highs in the last week of May. Such performance shows signs that the Defi coin is not going to slow down in the months leading up to the end of the year.

Trading Volume 

UNISWAP became the first decentralized trading platform to process over $100B in volume, a sign DeFi is starting to compete in the big leagues of crypto. The milestone for the DEX, which launched just over two years ago, shows that Automated Market makers, which are based on token liquidity pools instead of centralized order books, are handling volume that’s coming to rival trading on centralized exchanges. If you believe in the decentralized finance industry, UNISWAP may be a great addition to your portfolio. UNISWAP exists to create liquidity — and therefore trading and the value that trading provides — for the DeFi sphere. Not only is it the most liquid decentralized exchange, but UNISWAP’s V3 upgrade makes cryptocurrency on the platform even more liquid. The milestone for the DEX, which launched just over two years ago, shows that automated market makers, which are based on token liquidity pools instead of centralized order books, are handling volume that’s coming to rival trading on centralized exchanges. 

 

Conclusion

As you can see from the above, UNISWAP (UNI) has a lot going for it. There are even rumors it might enter a partnership with Robinhood, though it's not clear what form that might take. UNISWAP is playing a significant role in bringing greater decentralization and solving liquidity issues in Defi. Investor confidence and the motivational sentiment are also high due to the strong fundamentals the project possesses. Experts think the UNI coin has plenty of growth ahead (10-15 years down the line, it might even surpass BTC) due to its extensive usage on the decentralized exchange, and investing in UNISWAP is one of the greatest financial decisions any investor could make for the long term. Therefore, now could be a good time to invest in UNISWAP (UNI) while the coin is performing very well. Perhaps, now could be the perfect time to buy UNI and could see you walk away with at least 47.7542% returns by the year’s end of 2021.

 

Want to invest in UNISWAP? You can now do it in the SAIΞVE App!



Disclaimer: All cryptocurrencies are high-risk investments. Not only are they volatile, meaning they could see heavy losses as well as dramatic gains, but it is such a new industry, we don't yet know how it will unfold. As an investor, it is important to think about whether UNISWAP could perform well in the long term and whether you're comfortable with the risks involved.

 


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