What Is UniSwap? Everything To Know About The Largest DEX On The Ethereum Blockchain

UniSwap is a decentralized cryptocurrency exchange in which users can trade Ethereum tokens. It is an automated exchange. 

It is the second-largest cryptocurrency project in the world, in terms of market capitalization. It is the fourth largest DeFi (decentralized finance) platform in the world. UniSwap has crypto assets worth 3 billion US dollars that are kept locked in its protocol. 

It is an ever-growing network of DeFi Apps. In business terms, it can be viewed as a financial marketplace in which developers, traders, and liquidity providers can participate together.

A feature that makes it stand apart from other similar platforms is that the marketplace can be accessed by anyone and is open to all. UniSwap has more than 300 integrations. UniSwap is compatible with all kinds of ERC-20 tokens in the market. 

UniSwap uses a set of liquidity pools, also known as smart contracts, to run the exchange.

The developer behind UniSwap is Hayden Adams who used to be an engineer at the German multinational conglomerate corporation Siemens. UniSwap was announced on November 2, 2018. After the announcement, the DEX was deployed on the Ethereum mainnet. 

Hayden Adams has actually planned to name the exchange as UniPeg, meaning a fusion of Unicorn and Pegasus. The name UniSwap was suggested by Vitalik Buterin, the Ethereum cofounder. 

Adams has said that he created UniSwap with an aim to specifically implement an x*y=k market maker. UniSwap runs on the Ethereum platform.

It is written in Solidity an object-oriented programming language used to implement smart contracts on the platform of multiple blockchains. Its license is GNU General Public License v3.0.  

The UniSwap ecosystem is a place for the users to swap, earn, and vote with hundred of DeFi apps, tools, and integrations built on the UniSwap Protocol. UniSwap ecosystem has aggregators, tools, Dapps, and wallets. 

Here is a list of each of them.

The UniSwap Ecosystem Aggregators

DEX AG, Kyber, Paraswap, Matcha, 1inch, Totle, and Shapeshift.

The UniSwap Ecosystem Tools 

APY Vision, Uniswaptimizer, Revert, DeFi Saver, Rotki, Nansen.ai, InstaDapp, Zerion, Enzyme.Finance, Token Terminal, defi-lab.xyz, Parsec Finance, Croco Finance, Boardroom, Snapshot, Flipside Crypto, Universe Finance, The Graph, Zapper.Fi, Unbound Finance, Dune Analytics, and Tally. 

The UniSwap Ecosystem Dapps 

Alpha Finance, Aloe, Endaoment, Futureswap, Sorbet, Pine Finance, OpenSea, Lixir, Visor Finance, Compound, PoolTogether, Rari Capital, Reflexer, Index Coop, Charm, Risk Harbour, Nexus Mutual, Augur, Gelato, Sommelier, Furucombo, Popsicle Finance, Ondo Finance, Gearbox, Euler, Mask, MakerDAO, Set Protocol, Brink Trade, and Aave.

The UniSwap Ecosystem Wallets

Eidoo, Monolith, Digifox, blockbanc, Torus, Burner Wallet, ONTO Wallet, Coinbase Wallet, Argent, Metamask, Coin98 Wallet, Rainbow Wallet, TokenPocket, DeBank, and imToken. 

UniSwap Community

UniSwap Community is described as an ecosystem of users, designers, and developers. It also contains educators. 

UniSwap has established a social media presence on Discord, Twitter, and Reddit. The Discord platform lets the users t ask questions and engage in conversations with the UniSwap community.

Whereas in its Reddit platform, one can contribute to the extensive community discussions.  Further UniSwap has a Governance Forum in which users can share their ideas and can take part in the governance of UniSwap.

What Is The Relevance Of UniSwap?

Most cryptocurrency exchanges take place on centralized exchanges. The platforms of these centralized exchanges are governed by a single entity, mostly the company that operates it. 

In the case of UniSwap, as it is a DEX, it is never under the ownership of a single authority. Instead, it is run by automated liquidity protocol, which is a kind of trading model that is relatively new. 

The exchange lets users list their tokens on it without paying any fees. This is a feature in opposition to the centralized exchanges as it levies high amounts of fees from users for any such services. This means that the users have full control over their funds all the time. 

In centralized exchanges, the control of the private keys of the user has to be vested with the owner and the orders have to be logged on an internal database. When it comes to DEX the orders are executed on the blockchain.

Thus, it is made not expensive at all and consumes less amount of time. The benefit of letting the users have control of their keys is there are no chances of the assets being lost even if the website gets hacked. 

UniSwap Features

UniSwap is an open-sourced code.

A code is said as open source when anyone can copy it to develop their own versions. In The case of UniSwap, its code could be taken by anyone who can develop it to make their own version of decentralized exchanges. 

Users can list their own tokens in the exchange without paying any service fee.

UniSwap Functioning 

UniSwap functions by running on two smart contracts. A smart contract is an automated computer program that is designed to perform particular functions when the specific conditions that lie mentioned already are met. 

UniSwap Smart Contracts: 

To enable all token trades or token swaps. 

To add tokens to the platform. 

An example of token swapping can be quoted as 

any of the tokens based on ERC20 can be swapped with any other token based on ERC20. 

Why Should You Use UniSwap?

There are three determining factors that can impact one’s decision-making in using UniSwap.

First of all, it’s very easy to use UniSwap. It does not require creating an account or a profile in it to use it. It also won’t ask for any personal details including name. One can provide their real anime while using it or they can use any name of their choice, or a false name, or a name by which their identity can not be understood by anyone else. 

A second factor is that it is safe to use as it runs on the Ethereum platform. Every transaction made on Ethereum is under monitoring and is recorded. In UniSwap the user’s funds are not transferred to a third party under any circumstance. This eliminates the risk of any counterparty risk.

The transactions take place directly between two parties who are engaged in the transaction and are done using their own wallets. The presence of a third party gives rise to the risk of trusting the assets with a not known custodian. 

Thirdly, the platform is global and there are no typical restrictions that it can’t be used in some countries. UniSwap also doesn’t require permission to use it. It is not even necessary to own a computer. The user only needs to have a smartphone with an internet connection. 

How To Use UniSwap?

One should have an Ethereum-supported crypto wallet in order to use UniSwap.

Steps To Use UniSwap

Step 1 – Open the UniSwap interface.

Step 2 – Connect the crypto wallet with UniSwap.

Step 3 – Select the token from which the exchange should be done.

Step 4 – Select the token to which the exchange should be done.

Step 5 – Press the SWAP button on the screen.

Step 6 – Carefully go through the preview of the transaction that appears on a pop-up window.

Step 7 – Open the crypto wallet and confirm the transaction request.

UniSwap: Funded By

UniSwap was funded with giant investments by Ric Burton, and venture capital firms such as Union Square Ventures LLC, Andreessen Horowitz, ParaFi, and Paradigm Venture Capital. 

UniSwap: Protocol 

UniSwap makes use of liquidity pools to carry out orders from users. It has the status of a public good, and its ownership and governance are in the hands of UNI token holders. 

UniSwap Governance Apps

The governance apps and platforms of UniSwap are Governance Forum, Governance Portal, and Snapshot.

Governance Forum as the name suggests is a forum for discussion to related to the governance of the exchange. Users have options to share proposals, and to give feedback on the functioning of the DEX. 

Governance Portal is the official governance voting portal. Users and others can visit the portal to watch and review live governance proposals. After watching the live review there is an option to live cast each one’s vote in the on-chain. 

Snapshot is a more simplified version of the voting process. In this one can cast vote in the off-chain. It’s an off-chain voting interface for community members to mention their feedback and thoughts during the initial stages of the proposal itself.

Casting votes as early as this can be more helpful as the proposal has just started and has not yet been computed yet. Also, there would not be the need to come back and change the proposal after the whole thing has been completed and wrapped up. 

The governance process has three consecutive stages named as Phase 1, Phase 2, and Phase 3. Phase 1 is the Tempertaure Check, Phase 2 is the Consensus Check, and Phase 3 is the Governance Proposal. 

The first phase, the Temperature Check comprises of a process is to analyze if there is enough will to make changes to the status quo. It lasts for two days, and at the end of it an election takes place In order to win it, there should be at least 25k UNI yes votes. 

If there are no changes suggested in the phase the governance proceeds to stage 2.

The second phase, the Consensus Check is all about combining all the feedback from the previous stage. Significant proposals are identified and proper discussions are held on them. The process lasts for five days and is followed by an election just like the previous stage. To win this vote the majority should earn a 50k UNI yes vote. 

The third and last phase, Governance Proposal concludes the governance process. This combines feedback from the previous stage just like the previous phase, the phase 2 combines feedback from phase 1. Other than this feedback there will also be an executable on-chain code. 

To submit an on0chain governance proposal each of the delegates should have at least a minimum balance of 2 m UNI in their account. The process lasts for 7 days.

At the end of this one-week process, there will be a majority vote held like in the two previous stages. And to win the election one needs to get a minimum of 40 m UNI yes votes and the threshold win. 

Also Read:- What Is DeGods NFT? Everything To Know About!

What Is UNI Token?

The UNI Token or the UniSwap token is a governance and ownership token tool that lets a community have ownership and stewardship of the protocol. 

UniSwap Medium Beyond Finance

Unicode is a virtual hackathon based on the UniSwap protocol. 

◾ PplPleaser x*y=k

The UniSwap V3 launch video was sold by PplPleaser for 310 ETH and contributed the amount to charity. 

◾ Unisocks 

Unisocks is a physical sock and it is mapped to the Ethereum tokens. 

UniSwap Brand Assets

UniSwap advertises its brand assets. Two of its major brand assets are Uniswap Lock and Image Assets.

◾ UniSwap Lockup

The lockup usually comes to use when the full UniSwap branding needs to be displayed. 

◾ UniSwap Image Assets 

UniSwap Image Assets contain images and backgrounds. These images can be used along with others in the category of brand assets. 

What Is UniSwap Grant?

There are three different continuous stages in this.

The application intake happens in stage one. 

In stage two, the UniSDwap team educates the received applications. Each of the grants is considered as a team. There will be an initial review continued by a call.

Then UniSwap will proceed to send questions through an email and the applicant will have to reply with either a yes or a no. Each of the applicants will have a point person who goes under the name of a Grant Analyst.

In stage three, grants are approved and grantees are selected. It can take up to 6 weeks to decide whether the proposal is a yes or a no. If the grant gets approved the recipient can expect to receive a fund for the first milestone.