Uniswap (UNI) is a cryptocurrency designed to be a tool for the community and built on top of the Ethereum platform. It is ranked 12 on the overall highest crypto with a market capitalization of almost $11.9 billion. UNI is the native governance token made for all the holders in the community. This means, the UNI holders have the right to vote on changes on the platform, be it new development or process. The community contributes to the important decisions through a governance vote.

Uniswap is based on DEX or decentralized exchange and there is no order book to make trades. This allows traders to do an exchange without a mediator and additional platform fees. DEX makes it secure and easy to exchange an ERC-20 token without depositing it on a centralized exchange. UNI coins have a maximum supply of 1 billion and 520 million of them in circulation. Existing Uniswap community members get the 60% and 40% made available for investors, consultants, and team members distributed over four years. UNI’s rate reached an all-time high of $36.83 on March 23, 2021.

Uniswap Breakdown

Uniswap has become one of the largest and most successful DeFi systems on Ethereum today that is used to exchange cryptocurrencies. This Ethereum-based automated market maker protocol enables the trade without a middleman and no order book. Uniswap is entirely decentralized and sustains liquidity by a reward system.

As Uni holders are the ones governing the protocol, Uniswap uses a Constant Product Market Maker that is built to constantly furnish liquidity in spite of the number of funds in the pool or the order size. At the moment, the transaction fee is cut to 0.3% and is given out to the liquidity providers which by default is added to the pool. The fees are allocated accordingly and providers can redeem them anytime.

Uniswap was developed to be a great protocol, even so, using the network made it costly. This issue was resolved with the release of Uniswap version 2 and the UNI token was born. Uniswap also compensates its users with freshly minted UNI tokens to lend their assets to the liquidity pools. This means the control of funds is managed by the UNI holders or users and this is where liquidity mining was developed. Uniswap V2 is already breaking records as it becomes the most predominantly used DEX.

The most recent addition is the Uniswap v3 where liquidity providers can instantly select tailored price ranges for which they are eyeing to capitalize liquidity. AMM or Automated market makers make it happen so anyone can provide liquidity and put their funds into action. The deployment of layer-2 on Optimism would significantly increase the transaction throughput and lessen the fees which is the aim of v3 iteration happening anytime soon.

Uniswap History

Uniswap was launched on the 2nd of November 2018 and is built on the Ethereum mainnet. The aim is to facilitate smooth exchanges between ERC-20 tokens (assets built on Ethereum) and not use any mediators to trade. Hayden Adams, creator and founder of Uniswap, created it over a year’s effort even without any prior programming skills. He used to work as a mechanical engineer and was enticed by Vitalik Buterin’s idea of a DEX on an Ethereum blockchain. Hayden applied for an Ethereum Foundation grant and was approved in July 2018. The funds were used to develop security and to provide a better user experience.

The launch of the initial version was a hit with original liquidity of $30,000 worth throughout 3 several tokens. Uniswap promptly gained acceptance and earned funds that allowed the team to work on version 2. Then after two years, Uniswap v3 was launched on the L1 Ethereum mainnet on May 5. Since then the Uniswap team is unstoppable in developing and improving the protocol.

Uniswap Price Factors

Uniswap rate is directly influenced by the demand of users on the platform. Other factors impacting UNI’s price are sentiment, technical and fundamental development, the news cycle, public economic factors and exchange in/outflows.

Availability

Uniswap uses an AMM system. Automated Market Maker is a method where the price is adjusted according to its supply and demand. It functions by adjusting UNI’s price depending on the ratio of how many coins there are in the liquidity pool.

The Uniswap v3 implementation made it more reliable, beneficial and fast as it introduced concentrated liquidity. This offers more options to the liquidity providers in selecting their preferred price range to allot their funds. Any successful upgrades will definitely impact the UNI’s rate as long as the platform can accommodate the holders.

Acceptance & Government regulations

The main driver of UNI’s price is its function as a governance token. This is an innovative way to earn UNI and have the power to manage the platform’s process and development. Certain affiliations and partnerships can influence n boosting the protocol that might lead to Uniswap’s price surge. Interest in investing in DeFi projects like Uniswap has become popular as more people understand the benefit of it.

Decentralized exchanges have been on the regulator’s eye for the method in which the exchange happens. Though this may positively change as more regulatory authorities have a deeper understanding of cryptocurrency and its market. This could then favor the UNI’s price in the future.

Uniswap News in the media

The news on the first launch of Uniswap gained more investors for its innovative way of handing control to their communities. increased the holders and made an impact on UNI’s rate. The overall growth in Uniswap through news and write-ups helps the price of the coin to go up particularly on every upgrade it releases. UNI has become the go-to crypto-asset particularly after the V3 launched, giving more power to their community.

Trading Uniswap

Uniswap dominated the market by investors’ rising interest in crypto as they gained more knowledge and recognized the most beneficial coin to trade. When trading Uniswap, the same trading concept applies that includes analyzing UNI’s price chart. If you don’t have an ERC20 token to swap, find a reputable broker according to your preferences and check if Uniswap is available on their platform. Then start funding your account with fiat currency. It is also best to buy a wallet to store your tokens. Then decide how many UNIs you want to buy and place an order for your broker to fulfill.

Take time to know what affects its rate and learn how to analyze the UNI’s chart. Follow reputable websites for news and the latest market movement that can influence UNI’s rate. Most importantly, adjust your trading strategy accordingly for any positive movement to gain profit. The Crypto market is highly volatile and understanding the risk is essential.