Uniswap is a popular decentralized cryptocurrency exchange that operates on the Ethereum blockchain. Most crypto trading occurs on centralized exchanges run by a single authority, such as Coinbase and Binance. Uniswap differs from these types of exchanges and is a fully decentralized system.
We can call it the more advanced version because it is not run or governed by any authority. It is entirely open-source and allows anyone to copy their code and create their decentralized exchange. A typical centralized exchange revolves around profit. The cost of listing a new coin is high. Whereas on the Uniswap system listing a new coin is free. Due to the decentralized nature of Uniswap, the private keys stay in the possession of the trader. This reduces the risk of fraud and the loss of assets. Uniswap currently stands as the fourth largest decentralized finance Defi platform.
The Goal
Only when trades take place on Uniswap can the price of tokens change. In essence, Uniswap is balancing the value of tokens and allowing for their switching based on how much people want to purchase and sell them for.
What coins are available on the system?
The coins that are available on Uniswap exceed 5,500. These tokens are available for trading on the regular and the Pro exchanges. Some of the many tokens available are AAVE, WBTC, ETH, DAI, and USDT. Some are not on the network, such as COMP and Binance BNB.
What are the fees?
As we discussed earlier, in comparison to a centralized network, Uniswap fees are reasonable. There’s a 0.3% fee for swapping tokens. There are no protocol charges. However, there may be a charge of 0.05% in the future.
How to use it?
The need for identification is unnecessary on Uniswap, making it a faster process. The process of swapping a token is very similar to connecting a wallet on MetaMask. You select two assets for swapping and select the amount of trading, and that’s it.
Conclusion
In the world of cryptocurrencies and blockchain, things change quickly. Built on Ethereum, Uniswap is a cutting-edge trading protocol. Without using a centralized entity, it enables anyone with an Ethereum wallet to exchange tokens. The development of decentralized exchange and finance is the most profitable for investors and businesses.
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