How to buy Uniswap online
This guide will explain the key things you need to know before you buy Uniswap. We will explore Uniswap’s history and the best online brokers with which to trade Uniswap tokens.
Compare where to buy UNI, and open an account
If you are already familiar with Uniswap and want to invest immediately, follow one of the links below to reach one of our recommended brokers. For more information on cryptocurrencies, check out our courses. To keep learning about Uniswap, scroll down.
What is Uniswap?
Uniswap is a cryptocurrency exchange for tokens on the Ethereum blockchain (ERC20), and UNI is the platform’s native token. The platform’s primary aim is to provide a seamless cryptocurrency exchange experience with minimal liquidity issues. Exchanges generally use an electronic list of buy and sell orders to facilitate market activity known as an order book. However, order books have a large number of orders and cancelations, so they are not ideal for Ethereum because it can only process 12-15 transactions per second and has a 10-19 second block time.
Uniswap offers a solution in the form of liquidity pools: individual pools of ERC20 token pairs. These pools ensure the exchange remains liquid whilst also preventing the blockchain from being overwhelmed by a large number of orders. The tokens are constantly available in the pools so can always be used for exchanges. UNI tokens are paid to those who lend to Uniswap’s liquidity pools, and these individuals are known as liquidity providers. Holders of UNI tokens can also vote on platform governance.
Having been founded in November 2018 by Hayden Adams, a former mechanical engineer at Siemens, Uniswap has grown rapidly and substantially. Its trading volume now stands at over $220m with over 38,000 daily users. Alternative solutions such as ‘second-layer scaling’ have been offered by providers like Loopring, but Uniswap’s liquidity pools continue to grow in popularity.
How does Uniswap work?
Uniswap works by using liquidity pools to allow convenient, seamless exchanges of cryptocurrencies to take place. Each pool is filled with a pair of cryptocurrencies, and users can freely exchange tokens in any pool paying a 0.30% transaction fee. The liquidity providers who lend these tokens into pools are incentivized by receiving part of this fee denominated in UNI. When liquidity providers burn their UNI tokens, they receive their portion of the pool plus any accrued fees.
Like Bitcoin, Uniswap is democratically governed. Holders of UNI tokens can contribute to development and governance decisions, influencing and voting on things like grants, liquidity pools, and partnerships. The system is designed to run smoothly and efficiently, allowing users to exchange ERC20 tokens quickly with no central regulatory authority. Tokens are always present so exchanges can occur constantly with no hiccups, and the Uniswap platform has become so popular that spin-off platforms have been creating using its technology, such as SushiSwap.
A step-by-step guide: How to invest in UNI
Step 1. Find an exchange to buy UNI
There are many online cryptocurrency exchanges to choose from when buying UNI. You can narrow down your search by checking out our reviews or selecting a service from the table at the top of this page. UNI has a multi-billion dollar market capitalisation, and it is supported by many platforms. Two of the best cryptocurrency exchanges that support UNI are listed below.
- Binance: One of the largest players in the cryptocurrency trading space, Binance allows users to efficiently trade hundreds of different cryptocurrencies, including UNI. Open a Binance account and buy UNI today >
- Changehero: Combining the user-friendly interface of smaller crypto exchanges with the reliability of larger exchanges, Changehero allows users to exchange a huge variety of cryptos for UNI quickly and anonymously. Get started by opening a ChangeHero account to buy UNI today >
Step 2. Sign up and fund your account
It is common when using cryptocurrency exchanges that you will need to sign up for an account before funding any trades. This usually involves an ID verification check that varies from platform to platform. Users must usually provide a copy of their photo ID.
If you want to buy UNI but do not have any cryptocurrency to use as payment, you can easily use a cryptocurrency exchange like Coinbase to purchase some Bitcoin, then you can transfer them into your account. Many exchanges now accept fiat money such as USD, GBP, and EUR.
Step 3. Buy UNI
When your exchange account is fully set up and funded, you can exchange the cryptocurrency/currency in your account for UNI. If you have loaded your account with Bitcoin, head to the exchange and check the current price of UNI in the UNI/BTC cryptocurrency pair. You can then execute your trade.
Step 4. (Optional) Get a suitable wallet
For enhanced security, you might want to consider getting a UNI wallet to transfer your tokens into for safekeeping. While this step is not a necessity, and the majority of exchanges allow you to hold your coins/tokens within your account, it can help protect your assets. A UNI wallet should only really be considered if you are planning to buy and hold a large quantity of UNI tokens for the long term to speculate on price increases. Here are two of the best UNI wallets that also support many other altcoins such as Ripple’s XRP, AAVE, and NEXO.
- Freewallet: As one of the most popular crypto wallets that supports over 100 different cryptos, Freewallet is a strong UNI wallet option. Open a Freewallet to store your UNI in today >
- Infinito Wallet: Infinito’s blockchain experts have built up a strong reputation, and the platform itself is viewed by many as one of the most secure cryptocurrency wallets around. Create an Infinito wallet for your UNI tokens now >
A step-by-step guide: How to trade UNI
Step 1. Find a broker
To trade UNI successfully, you need to open and close positions quickly to take advantage of market fluctuations. Brokers are often used by traders to facilitate this kind of activity. Before signing up to a broker, check if it supports UNI trading. Brokers offer access to a range of assets, but some brokers will not provide UNI trading services. If any broker is likely to support UNI, it will be one of the large players like eToro and Plus500.
Step 2. Deposit money
Brokers will usually allow you to fund your account using fiat currency (such as GBP, EUR and USD), but you can also use supported cryptocurrencies. Make sure you keep an eye on trading fees when using these services because they can quickly stack up if you don’t pay close attention.
Step 3. Decide how you’d like to trade
The two most commonly used methods for trading with an online broker are spread betting and contracts for difference (CFDs), but there are many other strategies you can deploy. When trading, your focus should be on following a good technical trading strategy. Try to learn as much as you can about these methods before starting to trade.
Step 4. Start trading
Now your account is set up, funded and ready to go, you should consider starting with a demo account so you can learn the ropes before risking real money. When trading UNI, you can go long or short, just like you could with stocks or with forex. A long position is when you invest in the belief that an asset (UNI) will rise in value. Going short (shorting) is when you invest your money into the belief that an asset will fall in value. Both can be profitable if utilised effectively.
Another trading strategy available when using online brokers is trading with leverage. This technique allows you to make large trades with a smaller amount of trade value (known as the margin), but we highly recommend that beginner traders avoid using leverage because it significantly increases the risks of losing large amounts of capital if the market moves against you.
Trading by its very nature involves taking advantage of market volatility, so make sure you recognise the risks and take your time. Never rush into making trades because if you miss out on something, there are always new opportunities around the corner.
You should always take your time to consider any investment. UNI is new, innovative technology and it should be respected as such. Make sure you consider it carefully before going down the route of investing.
Here is a summary of the pros and cons of Uniswap, along with some key questions to think about.
- Uniswap allows new crypto projects to be listed automatically, so you have access to the newest tokens faster
- The flat fee of 0.03% is much cheaper than most platforms
- Users maintain full custody of their funds rather than an exchange holding onto them.
- No need to provide personal information because you remain responsible for your own assets
- There is a risk of fake coins. Anyone can list fake coins and trick you into sending assets for an exchange
- Potential of transaction failures
If you still aren’t sure about investing in Uniswap, here are 3 important questions.
1.) Is now a good time to invest in UNI?
The answer to this question depends on your own individual investment strategy, which might be long term or short term. If you are a long-term investor, Uniswap’s growth may continue, and it has a chance of establishing itself as a leading cryptocurrency exchange, which will have a positive impact on the value of UNI tokens. In addition, holding UNI long-term could allow you to become actively involved in governance decisions as Uniswap progresses.
If short-term trading is your focus, the long-term outlook for Uniswap and UNI tokens is less relevant. You should instead focus on developing a knowledge of the key technical indicators that can help you trade effectively. Paying attention to the small details can pay off with significant returns.
To stay up-to-date with all the latest news surrounding Uniswap, check out our most recent analyses about the platform and UNI tokens below:
Uniswap could advance even more in the ongoing bull market, but the risk remains very high
Uniswap (UNI) price is up over 200% in less than a month. What’s next?
2.) What problem does Uniswap solve, and what are Uniswap’s investment prospects?
Uniswap makes cryptocurrency exchanges accessible and liquid. By using smart contracts and liquidity pools, users can exchange Ethereum-based tokens seamlessly. There are also wider benefits for the crypto space as a whole, as the Uniswap platform enhances its liquidity.
As an investment prospect, in 2020 Uniswap overtook Tether as Ethereum’s largest gas spender, and outdid Coinbase in terms of exchange volume. The platform is rapidly growing and the value proposition appears compelling.
Read about the latest news regarding Uniswap on the Invezz website:
Unisawp the first DeFi to pass $100b in volume: UNI reaches $33
Uniswap passes $13 as whales step into the market
Gemini moves to Singapore lists SGD, UNI, YFI, and more
3.) UNI investment for the long-term or short-term?
You need to understand your own investment criteria. Are you an individual who wants to make a quick buck via an aggressive short-term trading strategy, or would you rather hold UNI for a prolonged period in the hope of selling it later at a higher price?
For UNI, both options are viable. As a rapidly growing cryptocurrency, UNI will be subject to more volatility than older, more stable cryptos. Therefore, you may be able to successfully trade UNI. In the long term, the UNI macro story also looks promising.
Considerations for a long term investment strategy
If you are looking towards the future for UNI’s best days, and you intend to get in early, you should sign up for a reliable cryptocurrency exchange and buy UNI tokens. A personal wallet may come in handy if you plan on holding UNI tokens for a prolonged period of time. Fundamental analysis is always the key to long-term investment success.
Considerations for a short term trading strategy
If you want to trade UNI quickly and make a near-term profit from price fluctuations, the fundamentals become less important. Instead, you should focus on mastering technical analysis and signing up to a broker with low trading fees. By anticipating price movements and understanding charts, you can be a successful trader of UNI.