Decentralized Exchange

Uniswap Exchange Review 2023 – Everything you need to know before using Uniswap

Author: Sohrab Khawas

Sohrab Khawas right arrow

Author

    news-image

    Introduction

    It is becoming increasingly difficult to trust centralized exchanges ever since FTX’s collapse. With so much scrutiny and tiring KYCs, users are slowly turning to decentralized (DEX) exchanges. In this review, we will learn the pros, cons, and overall rating of the DEX – Uniswap.

    Some of the best features of DEX are that it requires no intermediaries or controlling entities to manage its operation, there is no requirement for KYC, and literally no censorship. You can remain anonymous yet get the full investment benefits of your cryptocurrencies. Let us see what is so special about Uniswap

    Overview

    Official Web Addresshttps://uniswap.org/
    HeadquartersNew York
    Country of OriginUnited States
    FounderHayden Adams
    Founding Year2018
    Exchange TypeDecentralized
    Trading OptionsSwapping Tokens
    Gas fees0.30%
    No of Tokens100
    Native TokenUniswap Token (UNI)
    Fiat currenciesNot supported
    Mobile AppNo official mobile app

    What is Uniswap?

    Uniswap is a decentralized exchange founded in 2012 by Hayden Adams. It is built on the Ethereum blockchain that allows users to exchange Ethereum chain-based tokens. It gained widespread adoption due to its simplicity and user-friendliness.

    Uniswap uses a unique trading model called “automated market making,” which allows users to trade tokens without the need for a centralized order book. Instead, Uniswap maintains a constantly updated pool of liquidity, which is provided by liquidity providers who earn a fee for their contribution. When a user wants to trade a token, the Uniswap smart contract automatically executes the trade using the liquidity pool, based on predetermined algorithmic pricing rules.

    In addition to its decentralized exchange function, Uniswap has also become a popular platform for launching new tokens through a process called an “initial liquidity offering” (ILO). This allows projects to raise funds and create a market for their tokens without the need for a traditional initial coin offering (ICO).

    Uniswap Protocol Review

    Features

    • Automated market-making: Uniswap uses a unique trading model that allows users to trade tokens without the need for a centralized order book.
    • Wide variety of tokens: Uniswap supports a large number of Ethereum-based tokens, including ERC-20 and ERC-721 tokens.
    • Easy to use: Uniswap has a simple and user-friendly interface, making it accessible to users of all experience levels.
    • Decentralized: Uniswap is a decentralized exchange, meaning it is not controlled by a central authority and users retain control of their assets at all times.
    • Open source: Uniswap’s code is open source, which allows anyone to audit and verify its functionality.
    • Initial liquidity offerings (ILOs): Uniswap allows projects to raise funds and create a market for their tokens through ILOs.
    • Reasonable fees: Uniswap charges relatively nominal fees compared to other decentralized exchanges, which makes it attractive to users.
    • High liquidity: Uniswap has a large and growing liquidity pool, which allows users to trade even large amounts of tokens without significantly affecting the market price
    • Liquidity Pool: Users can provide liquidity to the pool by depositing their cryptocurrencies into the pool and in turn, they will receive passive income

    Cryptocurrencies supported on Uniswap

    There are 100 cryptocurrencies available on Uniswap. Some of the popular cryptocurrencies are

    • USD Coin
    • Polygon Matic
    • Wrapped Ether
    • Tether 
    • Dai 
    • Wrapped BTC
    • Ethereum
    • Apecoin
    • Uniswap Token
    • Rocket Pool Protocol

    How to swap tokens on Uniswap?

    In order to use Uniswap, you need to connect any of the wallets like Metamask Wallet, Coinbase Wallet, or Wallet Connect (a Web3 wallet that is compatible with Ethereum Blockchain). Now let us learn how to swap tokens on Uniswap

    1. Go to the Uniswap website and click ‘Swap’
    2. Choose the Tokens you want to swap from the ‘to’ and ‘from’ fields.
    3. Connect the web3 wallet
    4. Check the current market price of the tokens and make necessary adjustments to see the desired final price
    5. Review the details and confirm the transaction
    6. You will receive the tokens in your wallet once the transaction is complete and the transaction will be recorded in the Ethereum blockchain
    7. Make sure that you have enough ETH in your wallet for the gas fee as it will be paid to the miners. 

    Exchange fees and supporting payments

    Uniswap charges fees for trades that are executed on its platform. These fees are used to compensate liquidity providers for their contribution to the liquidity pool, as well as to cover the costs of operating the Uniswap platform. The gas fee is 0.3% which is roughly around $10.23 for ETH/USD pair. 

    The fees on Uniswap are based on a “slippage” model, which means that the fees are determined by the amount of liquidity that is required to fill a trade. When a trade is executed on Uniswap, the smart contract automatically calculates the amount of liquidity that is needed to fill the trade at the current market price. The fee for the trade is then based on the amount of slippage, or price difference, between the current market price and the final execution price of the trade.

    In general, Uniswap’s fees are relatively low compared to other decentralized exchanges. The exact fee for a trade will depend on the specific trade and market conditions at the time the trade is executed.

    There are no hard limits on the size of trades that can be executed on Uniswap. However, it’s worth noting that the liquidity of certain markets may be limited, which could affect the ability to execute large trades without affecting the market price.

    Customer care

    As a decentralized exchange, Uniswap does not have a traditional customer service team in the way that centralized exchanges do. Instead, it relies on its community of users and developers to provide support and assistance.

    Uniswap has an active community of users on social media platforms such as Twitter and Telegram, where users can ask for help or share their experiences with the platform. In addition, Uniswap has a comprehensive documentation page on its website that provides detailed information on how to use the platform and troubleshoot common issues.

    If you encounter a problem with Uniswap or have a question about how the platform works, you can try reaching out to the Uniswap community for assistance. It’s also a good idea to check the documentation page to see if your issue has already been addressed.

    It’s worth noting that, as a decentralized exchange, Uniswap does not have the same level of customer support as centralized exchanges. If you are a beginner or are not comfortable with self-service support, you may want to consider using a centralized exchange that has a dedicated customer service team.

    Conclusion

    Uniswap is one of the simple and user-friendly decentralized exchanges with a notable reputation in the crypto world. Any user can easily swap tokens by connecting the web3 wallet like Metamask, Coinbase Wallet, or Walletconnect. The gas fee required for swapping tokens is 0.3% which lesser compared to other exchanges. 

    Uniswap also provides passive income for liquidity providers who provides liquidity to the market. The exchange also provides NFT where you can buy, sell and showcase your NFT collection. Moreover, due to the recent events in the crypto industry, investors are switching to DEX as they realize that Coins in your own wallet are safer than custodian wallets. 

    Ultimately whether to use Uniswap will depend on your requirements and needs. If you want to trade Ethereum-based tokens then Uniswap is worth considering as an option as it has a good reputation and a user-friendly platform. 

    FAQs

    Is Uniswap good for beginners?

    Uniswap is generally considered to be a good option for beginners who are interested in using a decentralized exchange. One of the main reasons for this is that it has a simple and user-friendly interface, which makes it easy for beginners to navigate. In addition, Uniswap’s automated market-making model means that users do not need to understand the complexities of an order book or how to place orders in a traditional exchange.

    Has Uniswap ever been hacked?

    Uniswap has never been hacked. However, there have been several phishing attacks against liquidity providers where they lost cryptocurrencies worth millions of dollars.

    Can I use Uniswap without KYC Verification?

    Yes, you can use Uniswap without KYC verification. There is no need to register on the platform or upload KYC documents like in centralized exchanges. Uniswap is a decentralized exchange and there is no need to register or do KYC verification in order to swap tokens on the exchange. 

    Can I Swap any tokens on Uniswap?

    Uniswap only supports Ethereum-based tokens and hence you can swap Ethereum-based tokens.

    uniswap - 8.2

    8.2

    • Gas Fees
    • Security
    • No of tokens
    • Earning Programs
    Overall
    3.8

    Pros

    • Decentralized exchange
    • No censorship
    • Full control of your wallets
    • No security risk as you manage your own wallet
    • Easy to use
    • 100 Tokens
    • Helps liquidity providers to earn passive income
    • Uses Automate Market Maker System which allows liquidity providers to earn passive income
    • Open source project which can be viewed by a wider community

    Cons

    • Fiat currencies are not supported
    • No options for advanced trading
    • Risk of liquidity shortages as Uniswap depends on users to provide liquidity
    • Risk of smart contract vulnerabilities which might lead to loss of funds
    • Unpredictable price volatility
    Show More

    Was this writing helpful?

    No Yes

    Related Articles

    Back to top button