What is uniswap? A detailed guide to understanding the uniswap

The majority of crypto trading that takes place on exchange platforms is centralized. The exchange company requires a traditional order system to run the trading operations successfully. Let us know what is Uniswap.

What is uniswap?

Uniswap is a decentralized type of crypto exchange platform. It means owned and run by a single authority instead the multiple sources controlling it. Uniswap runs on a new kind of model known as automated liquidity protocol.

The platform uniswap was created in 2021 on top of the Ethereum blockchain. Ethereum -blockchain is the second largest cryptocurrency project by market capitalization. The platform is comfortable with ERC-20 tokens and wallet services like meta wallet and MyEtherWallet.

The exchange is open source, which means the platform is available for everyone; anyone can copy the code and create their decentralized platform. Users can also list their tokens in exchange for free. Compared to a centralized exchange platform, the charges are meager.

 How does Uniswap work? 

Uniswap usually runs on two types of smart contracts: Exchange and Factory contracts. Smart contracts are automatic instructions only performed when specific conditions are met. 

Automated liquidity protocol?

Automated liquidity protocol solves the problem of the liquidity of central exchange through. Users create a large pool of funds. The maths algorithm determines the price for each token.

With this, trading can be easy, and users don’t have to wait for the opposite party to execute the trades. 

How to determine the Token price? 

Uniswap uses an automated market system to determine the price of each token. The method uses standing mathematical equations based on supply and chain demand. The algorithm works by increasing and decreasing the price of coins depending on the number of coins. 

When a user adds an ERC-20 token to Uniswap he also has some amount of ERC-20 token and another ERC-20 token to start the liquidity pool.  

How to use Uniswap? 

First, you need ERC-20-supported wallets such as MetaMask, WalletConnect, Coinbase wallet, Portis, or Fortmatic.

Once you set up the wallet, you must add ether to start trade and other operations. Slow, medium, and fast transaction speed is available on the Ethereum blockchain, varying on the transactional charges. Slow is the cheapest, and fast is the most expensive. 


 Uniswap decentralized crypto exchange platform makes trading secure and easy. Anyone can easily participate and make trades via its exchange. If you want to trade with uniswap is an excellent option. Visit our other blogs for other informative sessions on cryptocurrencies, blockchain, and technology.