Invezz is an independent platform with the goal of helping users achieve financial freedom. In order to fund our work, we partner with advertisers who compensate us for users that Invezz refers to their services. While our reviews and assessments of each product on the site are independent and unbiased, brands may pay to appear higher up our table rankings or place ads in specific areas of the site. The order in which products and services appear on Invezz does not represent an endorsement from us, and please be aware that there may be other platforms available to you than the products and services that appear on our website. Read more about how we make money >
Uniswap is a decentralised exchange (DEX) that allows users to trade thousands of different cryptocurrency tokens, and the platform’s native token is UNI.
- Uniswap is a decentralised cryptocurrency exchange, meaning it has no central governing body. It is now one of the largest DEXs on the planet.
- It is built on top of the Ethereum blockchain, a network that allows developers to build decentralised apps. This means Uniswap is compatible with all ERC-20 tokens.
- Rather than using an order book like a conventional exchange (e.g. stock exchanges), Uniswap uses something called an automated liquidity protocol to keep things ticking.
What is Uniswap?
Founded on 2nd November 2018 by Hayden Adams, Uniswap is one of the most popular decentralised exchanges, facilitating automated transactions between cryptocurrency tokens on the Ethereum blockchain by using smart contracts: pieces of code that execute automatically when set criteria are fulfilled.
Created in September 2020, Uniswap’s native cryptocurrency, UNI, is a governance token that gives holders the right to vote on new developments and changes to the platform. This includes alterations to its fee structure and the distribution of newly minted tokens.
Sticking with the theme of decentralisation, Uniswap is completely open-source and transparent. This means that anyone could copy the code and create their own DEX, and users are even allowed to list their own tokens on the exchange for free.
A key part of the cryptocurrency/DeFi narrative is the aim to break away from the traditional financial institutions that have some claim to have led to much of the world’s economic unrest. As a result, many Uniswap users enjoy the fact their trades are executed directly on the blockchain, whereas other crypto exchanges require users to give up their private keys to log orders on an internal database.
Uniswap’s automated liquidity protocol is key to how the platform functions. Rather than the ‘buy’ and ‘sell’ orders you would find in traditional finance, Uniswap uses liquidity pools: separate stores of cryptocurrency tokens provided by liquidity providers (users) for rewards. This means that tokens are available anytime someone wants to make a trade, guaranteeing their liquidity.
You can buy UNI tokens and store them in a cryptocurrency wallet just like any other token; check out our step-by-step guide to find out how.
A brief history of Uniswap
Uniswap has developed rapidly in recent years to become one of the leading decentralised exchanges. Below, we take a look at some of the platform’s history.
- The idea for Uniswap came from Ethereum founder, Vitalik Buterin, in 2016. He first suggested the idea of a DEX with an automated market maker. Hayden Adams then took this idea and began turning it into a functional product.
- Adams received several grants along with $100,000 from the Ethereum foundation to help the concept achieve commercialisation.
- By 2020, Uniswap had achieved a daily trading volume in the hundreds of millions.
- In April 2020, Uniswap’s website was taken down temporarily following a hacking attempt.
Where can I learn more?
If learning more about Uniswap is on your to-do list, check out our hub page; it’s a good place to start your learning process. Alternatively, to learn more about the broader cryptocurrency space, check out any of the courses below by clicking the relevant link.
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >