Uniswap is an Ethereum-based token exchange protocol. Uniswap is a decentralized exchange. Compared to traditional centralized trading platforms, Uniswap does not require KYC (identity authentication) and asset custody. Users can trade directly through web3 wallet without registration, authentication, etc.

Decentralized exchanges for digital assets.

On the one hand, centralized exchanges face the risks of power regulation, hackers stealing coins, and the exchange itself running away. In particular, the control of assets is not in the hands of ordinary users. Decentralized exchanges are an essential part of the crypto world for the concept of decentralization and no need to trust third parties. On the other hand, before Uniswap introduced the automated Market Maker (AMM) model, the decentralized exchange space continued the traditional order book and over-the-counter market making model. In terms of transaction speed and transaction depth, it cannot support the use of a large number of users, and it also lacks incentive model.

Uniswap is an automated liquidity protocol, powered by a "constant product" formula and executed in a non-upgradable smart contract system on the Ethereum blockchain. It eliminates the need for trusted intermediaries and prioritizes decentralization, censorship resistance, and security.

Each Uniswap smart contract or pair manages a liquidity pool consisting of two ERC-20 token reserves. Anyone can become a liquidity provider (LP) in the mine pool by depositing the equivalent value of each base token in exchange for mine pool tokens. These tokens track the LP share of the total reserves proportionately and can be redeemed at any time. Currency pairs act as automated market makers, ready to accept one token for another, as long as the "constant product" formula is retained. This formula can be expressed simply as x * y = k, indicating that transactions must not change the product (k) of a pair of reserve balances (x and y). Because K remains constant with respect to the reference frame of the transaction, it is often called an invariant. In practice, Uniswap charges a fee of 0.30% on transactions and adds it to the reserve. As a result, each transaction actually increases k. This functioned as a payment to LP when they destroyed pool tokens in order to withdraw a portion of their total reserves. In the future, this fee may be reduced to 0.25% and the remaining 0.05% will be withheld as a fee within the scope of the agreement.

UNI is an important means of self-government for Uniswap community. It has the function of governance vote and is a governance token.

A leader in decentralized exchanges, it once traded $1 billion a day.

Automated market makers (AMM) replace the traditional order book model.

What everyone didn't expect was the way UNI was distributed, with ordinary users entitled to a slice of the pie as well as liquidity providers. 60% of the UNI Genesis supply will be allocated to Uniswap community members, of which a quarter (15% of the total supply) has been allocated to past users.

The official reward for some specific liquidity pools is UNI tokens for miners who provide liquidity.

One is from centralized exchanges, which tend to provide a great Web experience. On the other hand, due to its decentralized nature, its code is easy to copy. For example, Sushiswap borrows a large portion of unisWAp's code and even has a very similar front end.

The value of UNI is essentially based on Uniswap's leading position in DEX and the potential for future profits.

Free loss and slippage may be a stumbling block to its development. Meanwhile, the project side and investors hold more tokens and have greater selling pressure.

In the short term, it is likely that a portion of Uniswap agreement transaction fees will be allocated to UNI under the governance scheme, allowing UNI to capture part of the fee value to stabilize its price support. In the long run, the convergence of liquidity provider and currency holder interests allows UNI to capture the full value of fees while liquidity provider benefits are realized through UNI itself. This is a win-win situation for liquidity providers, UNI currency holders, project partners, ecological partners, etc. However, the formation of this situation needs the joint efforts of the community and needs to be promoted from all aspects, which is difficult to achieve in a short period of time. What can be achieved sooner rather than later is to pass some of the transaction fees to UNI token holders.

Decentralized exchanges lead, the potential for profit.