Uniswap is a decentralized exchange protocol that is built on Ethereum to swap ERC20 tokens. It functions as an automated liquidity protocol, which implies that it does not follow the traditional “order book” model. It allows its users to swap tokens and trade without any intermediaries, thus ensuring a high degree of decentralization.
In simple terms, Uniswap is a framework that enables its users to swap tokens directly from their wallets without any intermediaries or custody. With Uniswap, you can use smart contracts to:
- swap tokens
- add liquidity/ provide liquidity
- remove liquidity from pools
How does Uniswap work?
Contrary to the traditional architecture of the “order book” model which many crypto exchange platforms use, Uniswap works with the help of the following two components:
- Liquidity Pools
- Constant Product Market Maker Protocol
What are the advantages of Uniswap?
Uniswap offers many advantages, which make it the preferable choice as compared to the traditional crypto exchanges, such as:
- Anonymity
- Security
- Trustlessness
- New Tokens
- Low Fees
Uniswap is a very innovative protocol built on Ethereum, and with the advantages it offers, it has managed to gain a lot of traction from the right investors. It is an intriguing step forward towards a trustless and decentralized financial system.
Parabolic Tech knows how to make your token on a bumper listing :
- Analyze the swapping benefit
- Choose the best alternative
- Deploy on the right network
- Follow up the price variation