Uniswap Token (UNI)-The Unicorn Token
Uniswap is a cryptocurrency exchange that uses a decentralized network protocol. Uniswap is also the name of the company that initially built the Uniswap protocol. The protocol facilitates automated transactions between cryptocurrency tokens on the Ethereum blockchain through the use of smart contracts.
As of October 2020, Uniswap was estimated to be the largest decentralized exchange and the fourth largest cryptocurrency exchange overall by daily trading volume.
Uniswap was created on November 2, 2018, by Hayden Adams a former mechanical engineer at Siemens. Uniswap came about as a plan to introduce AMMs (Automated Market Makers) on Ethereum to a wider audience.
Adams worked on various projects while finalizing Uniswap, and his work was informed directly by Ethereum creator Vitalik Buterin. Buterin even ended up giving the protocol its name — it was originally known as Unipeg.
Adams has also said that the original inspiration for the Uniswap platform came from one of Buterin’s own blog posts. His original idea to focus on Ethereum came after a friend convinced him to begin researching and understanding the protocol in 2017.
The Uniswap Protocol is an open-source protocol for providing liquidity and trading ERC20 tokens on Ethereum. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchange activity. The protocol is non-upgradable and designed to be censorship resistant.
The Uniswap Protocol and the Uniswap Interface were developed by Uniswap Labs.
To begin, we should make clear the distinctions between the different areas of "Uniswap", some of which may confuse new users.
Uniswap Labs: The company which developed the Uniswap protocol, along with the web interface.
The Uniswap Protocol: A suite of persistent, non-upgradable smart contracts that together create an automated market maker, a protocol that facilitates peer-to-peer market making and swapping of ERC-20 tokens on the Ethereum blockchain.
The Uniswap Interface: A web interface that allows for easy interaction with the Uniswap protocol. The interface is only one of many ways one may interact with the Uniswap protocol.
Uniswap Governance: A governance system for governing the Uniswap Protocol, enabled by the UNI token.
The Uniswap protocol is a peer-to-peer system designed for exchanging cryptocurrencies (ERC-20 Tokens) on the Ethereum blockchain. The protocol is implemented as a set of persistent, non-upgradable smart contracts; designed to prioritize censorship resistance, security, self-custody, and to function without any trusted intermediaries who may selectively restrict access.
There are currently three versions of the Uniswap protocol. V1 and V2 are open source and licensed under GPL. V3 is open source with slight modifications, which are viewable here. Each version of Uniswap, once deployed, will function in perpetuity, with 100% uptime, provided the continued existence of the Ethereum blockchain.
To understand how the Uniswap protocol differs from a traditional exchange, it is helpful to first look at two subjects: how the Automated Market Maker design deviates from traditional central limit order book-based exchanges, and how permissionless systems depart from conventional permissionless systems.
Order Book VS AMM
Most publicly accessible markets use a central limit order book style of exchange, where buyers and sellers create orders organized by price level that is progressively filled as demand shifts. Anyone who has traded stocks through brokerage firms will be familiar with an order book system.
The Uniswap protocol takes a different approach, using an Automated Market Maker (AMM), sometimes referred to as a Constant Function Market Maker, in place of an order book.
At a very high level, an AMM replaces the buy and sell orders in an order book market with a liquidity pool of two assets, both valued relative to each other. As one asset is traded for the other, the relative prices of the two assets shift, and a new market rate for both is determined. In this dynamic, a buyer or seller trades directly with the pool, rather than with specific orders left by other parties. The advantages and disadvantages of Automated Market Makers versus their traditional order book counterparts are under active research by a growing number of parties. We have collected some notable examples on our research page.
The term order book refers to an electronic list of buy and sell orders for a specific security or financial instrument organized by price level. An order book lists the number of shares being bid on or offered at each price point, or market depth. It also identifies the market participants behind the buy and sells orders, though some choose to remain anonymous. These lists help traders and also improve market transparency because they provide valuable trading information.
The second departure from traditional markets is the permissionless and immutable design of the Uniswap protocol. These design decisions were inspired by Ethereum's core tenets and a commitment to the ideals of permissionless access and immutability as indispensable components of a future in which anyone in the world can access financial services without fear of discrimination or counter-party risk.
Permissionless design means that the protocol's services are entirely open for public use, with no ability to selectively restrict who can or cannot use them. Anyone can swap, provide liquidity, or create new markets at will. This is a departure from traditional financial services, which typically restrict access based on geography, wealth status, and age.
The protocol is also immutable, in other words not upgradeable. No party is able to pause the contracts, reverse trade execution, or otherwise change the behaviour of the protocol in any way. It is worth noting that Uniswap Governance has the right (but no obligation) to divert a percentage of swap fees on any pool to a specified address. However, this capability is known to all participants in advance, and to prevent abuse, the percentage is constrained between 10% and 25%.
The UNI token was launched on September 17 2020 as the government token at $4. The next day it hit $8.39. One billion UNI coins were minted at genesis which will become even more accessible to community members, team members, investors, and advisors over the next 4 years. UNI is a governance token that facilitates greater community involvement and oversight., UNI holders can vote on Uniswap project developments that determine the platform's evolutionary trajectory. UNI holders can also use the token to fund liquidity mining pools, grants, partnerships, and other growth-driven initiatives that expand Uniswap's usability and reach.
As the Uniswap community grows, further diversifying UNI holdings, the founding team will play an increasingly diminished role in platform governance by design. This is evidence that the concepts of decentralization and alignment of incentives — both central to the DeFi revolution — are being put into practice by Uniswap.
For example, the latest governance vote conducted over Halloween of 2020, was to decide on an Airdrop of free UNI tokens to users who interacted with Uniswap over a third-party interface such as Argent, Dharma, and My Ether Wallet (MEW) but who were left out in the initial airdrop. If it passed, it would have meant a UNI airdrop to an additional 12,619 addresses.
Despite the majority having voted in favour of the proposal, it fell short since it only received 37 million votes, and 40 million are needed to form a quorum.
Following a common token distribution trend in the DeFi ecosystem, Uniswap executed an airdrop of 400 UNI tokens to anyone who had used the platform — equating to a value of around $1,400 at the time of transfer — to approximately 250,000 Ethereum addresses. Although UNI serves as a governance token on the Uniswap platform, investors can also trade the token on exchanges and treat it as a speculative investment.
If you would like to buy UNI tokens, you can purchase them in several big exchanges :
1. Binance Exchange - you can purchase FIL on Binance using your mobile phone or desktop. You only need to follow the step as instructed. You can also receive a 25% discount on trading fees using Binance Coin (BNB) instead of cash. Use the link above for a bonus 10% discount
2. CoinBase - this is one of the most popular platforms because it is easy to use on your phone or tablet and is available in most countries. On CoinBase you will also find many of the top 100 coins. CoinBase will send email confirmations for another layer of security if you are using a PC. CoinBase also can be login using your phone. When you join CoinBase you can get AUD 13.84 in free Bitcoin when you buy or sell AUD 138.41 or more, by using the above link.
3. FTX - Trade Bitcoin, Doge, and other cryptos with zero fees on FTX. Use referral code “24Boston” or use the link above and get a free coin when you trade $10 worth of coins
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