Uniswap PRICE USD CHART

Uniswap is a decentralized, permissionless exchange protocol that allows the listing and trading of ERC-20 tokens. It is an automated liquidity protocol that can be used for creating and trading crypto. Being a decentralized exchange, Uniswap removes the middlemen and enables users to trade crypto without any intermediaries.

The native cryptocurrency of the Uniswap protocol is called UNI. It is a governance token. UNI has a total token supply of 1 billion minted at genesis.

The following are some of the key benefits of decentralized exchanges like Uniswap:

• Improved safety – As Uniswap removes the need for intermediaries, funds are never in the control of a third party. Users can trade directly with each other while maintaining custody of their assets.
• Increased accessibility – Uniswap is a permissionless exchange, meaning that anyone from anywhere in the world can use Uniswap. There are no borders or financial conditions on who may trade on Uniswap.
• Ability to maintain anonymity – Uniswap does not ask users for their personal information and thus enables them to keep their identities anonymous.

Uniswap facilitates the exchange of tokens but not in the traditional way by using order books. It does so by using a Constant Product Market Maker mechanism derived from the Automated Market Maker (AMM) model. This model is designed to always provide liquidity regardless of the order size or amount of funds in the pool. Here, the price is determined algorithmically based on the proportion of the two assets being traded.

There are two key players in Uniswap’s mechanism:

• Automated Market Makers or AMMs – These are smart contracts that hold liquidity pools that traders can use for swaps.
• The liquidity providers or LPs – They fund the liquidity pools and, as a reward, receive a part of the fee traders pay to the pool for the swap.

Let’s understand the mechanism in more detail:

The Liquidity Providers deposit equal amounts of two tokens to create a pool or a market on the AMM. Let’s call these tokens x and y. To calculate the total liquidity in the pool, Uniswap takes the quantity of x and y and multiples them to find k.

Here’s how the equation works out: x * y = k

The main idea of liquidity pools on Uniswap is that the total liquidity, k, always remains constant. However, whenever a trader makes a swap, the quantity of both tokens in the pool changes. For instance, if the user swaps token x for y, the number of x in the pool increases, whereas the number of y decreases (the trader gives x and takes y). 

But, as mentioned above, the total liquidity in the pool (x * y) must remain constant. Thus, market makers on Uniswap need to swap y for x (reverse trade of the trader). The cost incurred to maintain the equation x * y = k is what determines the price of a swap on Uniswap.

Uniswap was launched in 2018 on the Ethereum Mainnet. It was born out of an idea for a decentralized exchange (DEX) that uses an automated market maker (AMM) mechanism given by Vitalik Buterin, one of the founders of Ethereum. Hayden Adams created it with $100,000 in funding from an Ethereum Foundation grant. 

The team behind Uniswap has worked extensively to create state-of-the-art open-source applications that can be used to access the Uniswap protocol and contribute to the world of decentralized finance. Since its inception, the Uniswap protocol has served as a trustless and highly decentralized financial infrastructure. 

Uniswap launched the UNI token in September 2020. It featured a one-of-a-kind distribution method in which 400 UNI tokens were “airdropped” to every Ethereum address that had ever used Uniswap. The airdrop was received by over 250,000 Ethereum addresses and was worth about $1,400 at the time.

Uniswap represents a fundamental shift in the industry and offers traders a safer alternative to traditional centralized exchanges that lack transparency and are susceptible to bugs and hacks. 

It is quite reliable, and if we look closely, it only suffers from the rug pull issue that is present due to it being decentralized and open for all. However, as Uniswap is an open network, anyone can add liquidity to it and enable trading for an ERC-20 token that could possibly be a scam project. In the past, Uniswap has suffered several breaches involving minor tokens. Some cases of such exploits include:

• $300,000 to $1,000,000 of imBTC was stolen in April 2020
• $370,000 worth of Opyn tokens was stolen in August 2020

Typically, theft and fraud online are done by hacking the users’ online/hot wallets. Malicious attackers do so to gain access to the users’ private keys, allowing them to control their wallets.

Hardware/cold wallets overcome this vulnerability by storing private keys on physical storage devices that are disconnected from the internet and hence out of reach of malicious actors.

A Ledger hardware wallet can save users’ private keys offline. This makes the private keys inaccessible for anyone but the user, even in the event of a computer hack. 

The Ledger Live app enables users to manage 1800+ coins and tokens from a smartphone or desktop, making the system extremely convenient. The provision to use a PayPal account or Debit/Credit Card to purchase Uniswap (UNI) offered by Ledger is also beneficial for new users. Follow the simple steps below to purchase UNI on a Ledger wallet: 

1. Get a Ledger hardware wallet.
2. Download and install Ledger web or mobile application.
3. Connect the app with the Ledger hardware wallet.
4. Install the Ethereum application from the Ledger Live dashboard. 
5. Start buying UNI using Ledger Live.