What is Uniswap
What is Uniswap.
Uniswap is a well-known Ethereum-based decentralized crypto exchange. An automated liquidity protocol is used by Uniswap, which is completely decentralized (meaning it isn’t owned or maintained by a single company). Smart contracts for the Exchange and Factory contracts are used to operate Uniswap. When certain criteria are fulfilled, these computer programs will automatically conduct a set of pre-programmed actions. The Factory contract is used to create new tokens, and the Exchange contract acts as a middleman for all token exchanges.
Centralized Exchanges.
Centralized exchanges like Coinbase and Binance handle the overwhelming bulk of cryptocurrency trading. These platforms are administered by the exchange operator and employ a typical order book mechanism to enable trade. There is no guarantee that you will be able to sell one bitcoin for $22,000 on a controlled exchange, therefore you must wait for a buyer to materialize who is willing to purchase the same number of bitcoin at that price.
Open Source.
Anyone may use Uniswap’s code to build their own decentralized exchanges, since it is totally open source. It even enables users to list tokens for free on the market. Due to the high listing costs and business motives of traditional centralized exchanges, this distinction stands out. It is more time-consuming and costly to execute orders on a blockchain using Uniswap. This compels traders to give up ownership of their private keys for the sake of logging orders in an internal database. But, as of early May 2021, Uniswap v3 was introduced to speed up and lower the cost of transactions.
Uni Coin.
On its way towards total decentralization, Uniswap issued the UNI coin. It enabled stakeholders to vote on critical protocol modifications and development projects, after years of successful operation. A common method for DeFi applications to thank loyal customers is via airdrops, which Uniswap has indicated it aims to give 1 billion UNI over the next four years.
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