Buy Uniswap (UNI)
The popularity of Uniswap today is incredible. The platform ranks first in Etherium regarding the amount of gas spent and network resources spent on commissions in general. Uniswap is also responsible for the current increase in commissions and expensive ETH transactions, and the platform is not losing users because of that. In other words, people need Uniswap - also to participate in the current decentralised finance revolution.
This article will tell you about the Uniswap token, the Uniswap exchange, and how to buy UNI.
What is Uniswap?
Uniswap is a decentralised exchange based on Ethereum that allows anyone to exchange their ERC20 tokens. Anyone can do that, and no registration, identity verification or other things that exchanges usually require are needed for the transactions. The Uniswap protocol was created by Hayden Adams, who in turn was inspired by the publication of Vitalik Buterin.
The unique thing about ERC20 tokens is that the coins on this standard are interchangeable, meaning that they are essentially equal to each other within the Etherium blockchain. This allows them to be exchanged without any problems.
Uniswap was created to solve the liquidity problem faced by conventional cryptocurrency exchanges. Liquidity itself is the ability to sell any stock of coins on the platform without significantly affecting the price, which requires many sellers and buyers. To understand the term, you need to remember how cryptocurrency exchanges work.
Let's say you want to buy 100 ethers at $400. To do that, you place a buy order, after which the exchange starts looking for orders to sell ETH for $400 or lower. If the volume of sell orders exceeds the required amount of 100 ethers, then the order is executed, and the coins are sold. If there are too few sellers, there is not enough liquidity - the order is not fully completed. If there are no response orders, the initial order is sent to the market, which we are already familiar with.
Uniswap has no such thing - it creates a market automatically, and because of this, trades are executed almost instantly. This is why it is called an AMM or automatic market maker.
It is essential to understand that to exchange coins on the usual exchange. In addition, you need to upload some coins to your wallet, place a trade order - i.e., specify the desired cryptocurrency and volume, and then withdraw funds. Uniswap does away with all these steps. With it, all you need to do is send coins from your wallet to a specific address and receive the tokens you want in return.
In technical terms, Uniswap is an automated protocol based on liquidity pools and created on the Ethereum blockchain. Users create liquidity pools with the participation of smart contracts. One pool is one marketplace, giving exchanges in a pair of compatible ERC 20 tokens.
The exchange lacks the familiar centralised tools - order book, centralised matching, intermediation tools. Instead, pools are automatically managed by smart contracts, which applies to adding tokens and trading them.
Uniswap is open source. The software is licensed under the GPL (General Public License).
Anyone can be a liquidity provider for an existing pool or create a new one. The value of each underlying token must be deposited. In return for the deposit, the participant receives pool tokens, which are similar to shares that determine the proportional ratio of the user's contribution to the total content of the liquidity pool. At any time, these tokens can be used to repurchase the underlying asset.
Uniswap coin and its role in the exchange
On 17 September 2020, Uniswap introduced a management token called UNI. There was no ICO or pre-mining. The tokens will be distributed between the community, the team, investors and editors according to a set schedule.
Initially, an airdrop of UNI was launched, where Uniswap offered 400 UNI tokens to active users already using the exchange. There is now a steady distribution of currency to liquidity providers for depositing assets into pools (a process called revenue farming).
There is a liquidity mining program running in four pools:
By participating in these, users are predicted to get a total of 5 million UNI per pool, approximately 83.3 UNI per day.
The primary role of the token is to provide decentralised management capabilities. UNI holders will be responsible for making management decisions and complying with generally accepted laws and regulations.
How Uniswap works
How a market based on an automated market maker works:
- The similarity to classic order book exchanges ends with there are trading pairs here, too, such as ETH/USDT.
- The user does not have to wait for a trader with a counteroffer to appear "on the other side" to make a trade.
- The market is organised automatically using a smart contract. It guarantees the transaction and the input/output of assets.
- While on decentralised exchanges with order books (like Binance DEX), transactions occur without intermediaries between users' wallets, AMM uses peer-to-contract (P2C) - users send funds into the contract and receive from the same. Therefore, the platform requires a web3 wallet (available options are Metamask, Coinbase Wallet, Fortmatic, Portis).
- The current market price of the asset is generated by a formula embedded in the smart contract.
- The liquidity in the protocol is created by users (liquidity providers).
Liquidity providers receive a financial reward for their work - 0.30% of the commissions on all trades executed in the pool whose reserves they provide.
Uniswap crypto: where to buy, sell, trade
If you want to buy Uniswap in Qatar, there are several ways to do so. First, you can use the popular and reliable Binance exchange to buy Uniswap (UNI). The following trading pairs are currently available: UNI/BNB, UNI/BTC, UNI/USDT, UNI/BUSD:
- Register to Binance or log in to your account.
- Refill your account with the desired cryptocurrency. Again, you can do this without verification.
- Go to the Spot Wallet section, where all assets supported by the exchange are listed.
- Find UNI in this list in the search box.
- Click "Trade" and specify the desired currency pair.
- The system will redirect you to the trading terminal, where buy and sell orders are created. Choose a market order if you want to buy a coin at the current market price or a limit order to set your price and wait for matches.
- Leverage trading with up to 5x for UNI/BTC, UNI/USDT pairs is also possible on the exchange. When creating an order, you need to select 'Isolated Margin'.
Making transactions from the Uniswap exchange level is easy, and it only takes a few steps to convert cryptocurrencies.
So, if you want to buy or invest in Uniswap in Qatar, you need to:
- First, you need to set up a Metamask wallet and then log in.
- On the exchange website, click on Connect to Wallet and then confirm the connection to the exchange. Once your wallet is integrated with the exchange, you can start trading using a simple form.
- To do this, z list 1 select the token you want to use to make purchases.
- Then from list 2, containing all tokens available on the exchange, select the one to be purchased.
- Fields 3 and 4 are used to determine the number of items the user will trade. Again, you only need to fill in one area, as the next will automatically be filled in.
This token is purchased either at the market price of the liquidity pool or not directly from another user. Other users in the Billiards tab provide the liquidity. A transaction fee of 0.3% of its value is added to liquidity. To complete the purchase, click on the exchange, then confirm the transaction concluded on the blockchain. On the other hand, the coins remain the property of the user until they are resold. Once the transaction is accepted, the coins purchased go directly into the investor's wallet and are not stored on the exchange. This solution provides greater security in the event of a hacker attack on the platform, for example. On the other hand, exchanging a purchased coin for another token is identical to a purchase transaction.
The Uniswap exchange is a popular decentralised cryptocurrency platform. In particular, it is valued by Ethereum investors. Decentralisation and the ability to manage the development of the exchange attract opponents of big cryptocurrency exchanges. In addition, the option of betting your tokens in liquidity pools allows for additional earnings. However, a limitation may be the ability to trade only fiat currencies and tokens not based on Ethereum.
Uniswap is a new step in the development of cryptocurrency exchanges. The platform operates in a decentralised way, and it does its job well. Its user base has at least doubled in August compared to the previous month, amid a boom in decentralised finance, and the figure is not going to stop.
The exchange is doing well and is running smoothly. Yes, it is seriously consuming the resources of the Ethereum network, but that is the cost of the current market situation. So, in the end, Uniswap deserves praise and a recommendation to use it.
Don't leave all your cryptocurrencies to the exchanges and read the coin news. Instead, try it and make money!