As expected of the cryptocurrency market, many cryptocurrency exchanges are popping up, aspiring to be another Binance or Coinbase. One of these exchanges is Uniswap, a relatively new application built on Ethereum that has become one of the most widely used options.
In this video, we’ll look at everything you need to know about UNISWAP.
How Did It Begin?
Starting back in 2016 as an idea proposed by Vitalik Buterin, one of the co-founders of Ethereum, Hayden Adams, the founder of Uniswap, began to work on the project.
It wasn’t until 2018 that the decentralized application was launched and became a functioning exchange.
What Is It Intended For?
Uniswap was created to create a decentralized exchange, also known as DEX, that employs an on-chain automated market maker while considering certain unique characteristics.
Uniswap’s use of the “Constant Product Market Maker Model” pricing mechanism makes it special.
What Is The Constant Product Market Maker Model?
This model operates on a formula that does not change based on the trade size or the asset being traded. They pool liquidity from users and price the assets—in this case, the Uniswap—within the pool using algorithms that decide the price of the assets.
Simply put, this model offers deep liquidity while maintaining low transaction fees and guaranteeing 24/7 service for as many users as possible. This convenience and efficiency are why crypto enthusiasts prefer Uniswap and other exchanges that use this model.
How has UNI Performed So far?
Like many exchanges, Uniswap has its own cryptocurrency called the UNI. The UNI has been deemed an extremely safe option for enthusiasts and beginners alike because of how it operates and because it’s built on Ethereum, guaranteeing the same level of security.
UNI has made it into the top 40 cryptocurrencies by market capitalization thanks to the price boom in September 2020 but has since settled. This is partly because the entire crypto market in the past few months has been illustrative, but experts estimate that the trading price of UNI by 2023 will be at around $9.02.
What Else Do We Need To Know?
Uniswap doesn’t have a mechanism that will modify its existing contracts, so if they decide to upgrade significantly, all the users will have to withdraw their funds and move them to new sets of contracts.
These videos are for educational and entertainment purposes only – THIS IS NOT FINANCIAL ADVICE!
Check out the video below, and be sure to watch our other trending videos on YouTube!
Recent Comments