Popular decentralized trading system Uniswap is well-known for supporting the automated trading of decentralized finance (DeFi) tokens.
Uniswap, an example of an automated market maker (AMM), was introduced in November 2018, but has gained a significant amount of popularity this year due to the DeFi craze and the resulting rise in token trading.
Uniswap intends to retain token trading fully automated and accessible to anybody holding tokens, while enhancing the efficiency of trading relative to established exchanges.
Uniswap increases efficiency by addressing liquidity concerns with automated methods, thereby avoiding the challenges that plagued the early decentralized exchanges.
In September 2020, Uniswap took a further step by establishing and distributing its own governance token, UNI, to previous protocol users. This increased both the entity's economic potential and its users' power to control its destiny, a desirable feature of decentralized entities..
The idea behind Uniswap was to let more people know about AMMs on Ethereum. Hayden Adams is an Ethereum developer who made the platform.
Adams worked on other projects while finishing up Uniswap, and Vitalik Buterin, who made Ethereum, gave him feedback on his work. Buterin even gave the protocol its name. Before he did, it was called Unipeg.
Adams has also said that one of Buterin's blog posts was where the idea for the Uniswap platform came from. The first time he thought of focusing on Ethereum was in 2017, when a friend persuaded him to start learning about Ethereum's protocol.
Over 310,000 people are members of the Uniswap DAO. If they hold UNI governance tokens, they can vote on the DEX's $1.6 billion treasury, its governance, and its road map. Anyone with a UNI can make a proposal, but it needs to get up to 25,000 "yes" votes before it can be taken further. The next step is the consensus check, where the person who made the proposal must explain the most important changes and get at least 50,000 votes in favor. In the last step, the governance phase, 40 million people must vote yes for the proposal to be accepted. In 2021, Uniswap had the most trades and the most money in its treasury, making it the most important DEX and the best DAO. But it is currently ranked second, behind BitDAO, which is a DAO that funds and invests in new crypto projects. Check out our in-depth look at Uniswap DAO and other top DAOs to learn how they are governed.
Uniswap exists to give the DeFi sphere liquidity, which means trading and the value that comes from trading.
The protocol is one of the most important AMMs in use right now. It works by using a formula for automated exchange: X x Y = K. Hayden Adams, who started Uniswap, says that he came up with the way the formula is used on the site.
Uniswap is more than just a decentralized exchange. It also tries to solve the liquidity problems that platforms like EtherDelta had.
By making the process of making a market automatic, the protocol reduces risk and costs for everyone involved. The mechanism also gets rid of the need for users to prove who they are. In theory, anyone can make a liquidity pool for any two tokens.
Uniswap says that their governance token (UNI) was made to "officially enshrin[e] Uniswap as publicly-owned and self-sustainable infrastructure while continuing to carefully protect its indestructible and autonomous qualities."
On November 2, 2018, Uniswap V2 came out with new features such as ERC-20 pairs, price oracles, flash swaps, and more. The mainnet got the latest version, Uniswap V3, on May 5, 2021. It gives liquidity providers better use of their capital, better execution for traders, and better infrastructure. Before V3 went live on the mainnet, the price of Uniswap hit an all-time high (ATH) of $44.97. Since it started, the UNI to AUD and UNI to EUR price pairs have gotten a lot of attention.
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