At the time of the advent of cryptocurrencies, Uniswap is certainly one of the most successful concepts in decentralized finance. But what exactly is Uniswap and how does it work? Decryption.
What is Uniswap?
Uniswap is free software that brings together a set of computer programs running on the Ethereum blockchain . The latter is a data exchange protocol, like Bitcoin, which allows information to be stored and transmitted in a secure manner and without any control instance. Uniswap thus makes it possible to exchange decentralized tokens (digital assets). This software works thanks to "unicorns" which convert tokens.
How does Uniswap work?
Uniswap is a decentralized exchange development protocol, precisely it is an automated liquidity protocol: there are no order books and users can trade without an intermediary with a high level of resistance to the censorship. The latter is one of the main value propositions of the cryptocurrency universe: no third party, state or company has the power to control these transactions. Only the network protocol has its own rules, known in advance. It is enough to respect these rules to be able to carry out trades. These operations are almost impossible to delete or modify.
Each user can also contribute to liquidity pools with a token, and receive commissions in the form of exchange fees. With the Uniswap protocol, anyone can create new markets and provide liquidity, making this innovative concept very popular with traders.
How to buy on Uniswap?
To be able to buy on Uniswap, you must have an external wallet supporting Ethereum. For the time being, it is not possible to buy Uniswap (UNI) directly in euros: you must therefore go through an exchange platform that accepts the euro to buy Ethers (ETH). Finally, you have to trade the Ethers on an exchange platform offering the ETH / UNI pair.
How to open an account on Uniswap?
To open an account on Uniswap, it is therefore necessary to have a wallet. The most famous is the MetaMask wallet. To create this wallet, you have to download MetaMask from the official website, this program then works as a browser extension. Once this is obtained, it must be fed with ETH or ERC-20 tokens via a fund transfer from another platform, or by buying Ether directly with the extension. Finally, by opening an account on the Uniswap site, the MetaMask wallet is linked. The Uniswap account is operational.
UNI, the Uniswap clone token
Uniswap was originally an exchange protocol (which it still is), it now has its own token called UNI. It is possible to recover UNIs by supplying a liquidity pool, like a bank deposit which makes it possible to finance the loans of those who wish to have UNI. By funding the pool, each member receives a commission in the form of Uniswap tokens.
