Uniswap is an automated liquidity protocol built on the Ethereum blockchain. With Uniswap, anyone can swap ERC-20 tokens without relying on a middleman. The platform relies on an automated market maker (AMM) approach, using smart contracts deployed on Ethereum and run by independent computers to set prices.

Launched on Ethereum mainnet in 2018 by Hayden Adams, Uniswap has rolled out multiple iterations since then. The latest, V3, introduces incremental updates and aims to improve capital efficiency compared with earlier versions.

Uniswap’s aim is to enable trustless, straightforward, automated token swaps, while also boosting performance and the overall user experience versus traditional exchange models.

What are UNI’s key features and how does it work?

Unlike a centralized exchange-where regulation is in place, users must deposit funds, and trading is mediated by the platform-Uniswap operates without an order book and works in a permissionless way. As a result, it doesn’t rely on matching a specific buyer price to a seller price. 

Instead, Uniswap runs smart contracts that manage liquidity pools. Traders swap tokens directly against the liquidity held in these pools. Through these contracts, users can exchange tokens or contribute liquidity to the pool to receive a fee (liquidity providers).

For pricing, Uniswap uses an AMM based on the Constant Product Market Maker Model, x*y=k, where k remains constant:

What makes Uniswap noteworthy? 

Uniswap is a decentralized exchange powered by AMMs. It uses pre-funded liquidity pools in place of conventional order book infrastructure. Liquidity providers earn passive returns on their deposits via trading fees, calculated based on the share of liquidity they contribute.

Smart contract algorithms determine trade pricing instead of order books, which keeps the system fully decentralized and puts users in control of their funds. 

Another distinguishing aspect is that users can supply their crypto to the protocol. By adding Ethereum tokens to Uniswap “liquidity pools,” they receive fees in return. This setup allows trades to be processed right away when the pool has sufficient liquidity.

The protocol also supports free token listings, which stands out from many traditional exchanges that typically charge a listing fee.

Where can you buy UNI?

UNI, the Uniswap protocol token, plays a role in the project’s governance. Token holders can vote on protocol updates and changes.

Uniswap (UNI) Coins can be purchased on most trading platforms found in the market tab. They may be traded using FIAT, stablecoins, and other cryptocurrencies. The Uniswap price is determined by the buy and sell orders shown on the order book.

Alternatively, you can acquire UNI directly through the Uniswap exchange. To do so, connect your crypto wallet to the Uniswap app and place your trade-usually requiring you to first buy another cryptocurrency. On Uniswap, UNI pricing is set by the AMM.