I. What is Uniswap?
Uniswap is a protocol that works on top of Ethereum for token exchange. Unlike most exchanges that are created and will charge a transaction fee, Uniswap is community-driven, being a tool for the community to trade tokens without paying platform fees or middlemen.
The founder of the Uniswap platform is Hayden Adams, after he was inspired by a post by Vitalik Buterin.
II. How Uniswap works
Any token can be listed in Uniswap by providing a pool of funds in ETH and the ERC20 token being traded.
Example: If you want to do a token exchange called DMM Governance (DMG), you will launch a new Uniswap smart contract for DMM Governance and create a liquidity pool for them. For example, an ETH capital is worth 1 million USD and the equivalent amount of DMG tokens is worth 1 million USD.
III. How is Uniswap different from other decentralized exchanges?
Other decentralized exchanges will typically connect buyers and sellers to price coins, but Uniswap works differently.
Uniswap uses a constant equation: x * y = k.
- x: number of ETH tokens
- y: Amount of ERC20 available in the liquidity pool
- k: is the constant value.
This equation uses the balance between ETH – ERC20 tokens and supply and demand to determine the price of that token
Example: When someone buys DMG with ETH, the supply of DMG decreases while the supply of ETH increases, i.e. the price of DMG increases.
IV. What are the risks of trading on UNISWAP?
Trading above is still risky. However, this risk comes from yourself. That is, you have to buy “junk” projects.
Any ERC20 token can be listed on Uniswap without permission. Each type of token only needs its own smart contract and liquidity pool.
Therefore, there are currently a lot of scammers creating junk tokens, if you touch these projects, there is no way out!
The most important thing is that you should choose reputable projects to play!
V. Features of Uniswap
Swap is a basic feature of Uniswap. If a user wants to use token A to buy token B, then they just need to enter the amount of token A they want to swap, the protocol will automatically calculate the amount of token B that the user can receive.
Uniswap will charge 0.3% per swap order.
2. Liquidity Pool
Whenever liquidity is deposited into a pool, LP tokens are automatically sent to the liquidity provider’s wallet. These LP tokens represent the contribution of a certain liquidity provider to a pool. The liquidity ratio of the pool provided determines the amount of liquidity tokens the provider receives. If a provider is mining a new pool, the number of LP tokens they will receive is calculated using the sqrt(x * y) formula, where x and y represent the amount of each token offered.
Whenever a transaction occurs, the sender of the transaction will be charged a fee of 0.3%. This fee is distributed proportionally to all LPs in the pool upon completion of the transaction.
In order to regain public liquidity with rewards from users’ transaction fees, liquidity providers need to burn the LP tokens they have.
3. Flash Swap
Flash Swap is the same feature as Flash Loan on Aave. Flash Swap on Uniswap allows users to withdraw assets in the liquidity pool of any ERC20 tokens on Uniswap and do as they please with no upfront fees, as long as at the end of the transaction the user has to meet 2 conditions :
Pay the withdrawn ERC20 tokens with the corresponding tokens in the pool
Return the withdrawn ERC20 tokens with a small fee
Swaps are extremely useful because they eliminate the upfront capital requirements and unnecessary order of operations constraints on Uniswap-related multi-step transactions.
Example: 1WETH = 1450 DAI. When a user withdraws 1450 DAI they must return 1 WETH, or 1450 DAI with a small fee at the end of the transaction.
Flash Swap Use Cases
On Kyber 1WETH= 1450DAI, on Uniswap 1WETH=1400DAI. User executes Flash Swap order to withdraw 1WETH at Uniswap then convert to Kyber to sell and return Uniswap with a profit of 50DAI.
All pools in Uniswap v3 can act as an oracle, providing access to liquidity data and price history. This capability opens up a wide range of on-chain use cases.
Storing the price and liquidity history directly in the contract greatly reduces the possibility of logic errors on the part of the contract and reduces the cost of integration by eliminating the need to store historical values.
Previous versions of Uniswap were designed to provide liquidity across the entire price range. This allows liquidity to be efficiently aggregated, but the majority of assets held in a pool are never used.
After considering this, the project development team decided to allow LPs to focus their liquidity on certain price ranges. Uniswap calls liquidity concentrated in a finite range a position. A position only needs to maintain enough reserves to support trading within its range and thus can act like a liquidity pool with larger reserves within that range.
Liquidity providers are free to create as many positions as they see fit for different price ranges. Furthermore, it is a mechanism to allow the market to decide where liquidity should be allocated. LPs can reduce their cost of capital by concentrating their liquidity in a narrow band around current prices.
5. Range Orders
Range Order is a feature that allows users to place buy/sell orders within a specific predefined price range, when the spot price of that asset matches the predefined price range, the protocol will automatically execute the buy/sell order. there.
Unlike some markets where limit orders may incur fees, Range Orders generate fees while the order is executed. This is because Range Order is technically a form of liquidity rather than a regular swap.
VI. Uniswap and other exchanges
Currently, Uniswap has lost its position as the “Top 1” decentralized exchange in the cryptocurrency market in terms of trading volume. Later exchanges such as Pancakeswap, Curve, DODO have gradually developed and occupied the top position of Uniswap.
VII. What is UNI Token?
1. Detailed Information about UNI Token
- Token name: UNI Token
- Ticker: UNI
- Blockchain: Ethereum
- Token Standard: ERC-20
- 0x1f9840a85d5aF5bf1D1762F925BDADdC4201F984 (ERC-20)
- 0xbf5140a22578168fd562dccf235e5d43a02ce9b1 (BEP-20)
- Total Supply: 1,000,000,000 UNI
- Circulating Supply: 1,000,000,000 UNI
- Total Value Locked (TVL): 5,673,174,711 USD
- Market Cap: 2,872,686,427 USD
2. UNI Token Allocation
UNI tokens are allocated as follows:
- Community: 60%
- Team: 21.51%
- Investors: 17.8%
- Advisor: 0.69%
3. UNI Token Noticeable Milestones
Token Release Schedule
4. Use Cases of UNI Token
UNI is the native token in Uniswap Protocol used for the following purposes:
- Governance: UNI token holders have the right to decide on changes in the protocol.
- Switch Fee
- The UNI token is also used as a reward for Liquidity Mining.
VIII. How to earn & own UNI Token?
Currently you can own UNI tokens by registering and buying on listed exchanges.
Where to buy and sell UNI tokens?
Currently, UNI is traded on many different exchanges with a total daily trading volume of about 141 million USD. The exchanges that list this token include: Binance, FTX, Coinbase, Huobi, OKX, Kucoin, etc.
IX. Which Crypto Wallets are suitable for UNI Token?
UNI is an ERC20 token, so you will have a lot of wallet options to store this token. You can choose from the following wallets:
- Floor wallet
- Popular ETH wallets: Metamask, Myetherwallet, Mycrypto, Coin98 Wallet
- Cold wallets: Ledger, Trezor
IX. Teams, Funds & Partners of UNI Token
2. Investment Funds
X. Where can UNI Token information be updated?
Currently, Crypto users can fully consult, research, and analyze information about UNISWAP through famous media newspapers such as Nasdaq, Bloomberg, Forbes, AP News, Yahoo!Finance, CoinTelegraph, Coindesk, etc.
These media are constantly updated with useful information, new activities, outstanding events of UNISWAP and all the topics surrounding it. Accordingly, Meta Lion Ventures continuously updates the topic of outstanding projects in Blockchain and hot events organized between Meta Lion & partners.
Since its start, Uniswap has promoted widespread adoption of cryptocurrencies. These days, a lot of DEXs have modeled their strategies after this one-of-a-kind platform. However, no effort has succeeded to this extent to this point.
However, there are certain drawbacks to Uniswap, such fake coins: Since anyone may list tokens on Uniswap, con artists will readily list bogus coins to deceive users. Second, a number of factors can cause transactions to fail: When the pool is short on funds to cover your transaction, the gas fee you choose to pay is too low and lacks liquidity.
The above is Meta Lion’s comment on the UNISWAP project which is our personal opinion, this is not investment advice at all. Investors should be responsible for their own decisions.