Get to know Uniswap in Crypto and how it works

Todaysgist.com, Jakarta In investment, the term Uniswap often appears, so what is Uniswap? Uniswap is a decentralized exchange that enables peer-to-peer markets.

Reporting from Investopedia, Monday (20/5/2024), Uniswap is also a cryptocurrency whose symbol is (UNI). The Uniswap platform allows users to trade cryptocurrencies without any involvement with a centralized third party.

The Uniswap blockchain is hosted on the Ethereum platform and governed by UNI holders. Uniswap describes its blockchain as a public good. The Uniswap blockchain is open source, meaning anyone can view and contribute to the blockchain code.

The Uniswap platform can support the exchange of any digital token that complies with the Ethereum technical standard known as ERC-20. Uniswap uses smart contracts, enabled by blockchain technology, to function as an automated market maker.

Uniswap users can safely create liquidity pools, provide liquidity and exchange various digital assets. As a decentralized exchange, Uniswap uses a permissionless design. The Uniswap protocol is available for anyone to use, and the Uniswap platform does not have the ability to selectively restrict access.

Anyone who chooses can use Uniswap to trade digital assets, provide liquidity, or create a new market for exchanging a new pair of digital assets.

The automation provided by smart contracts can make trading assets more efficient. Uniswap uses smart contracts to avoid liquidity issues that typically affect centralized exchanges. The elimination of profit-seeking third parties, such as centralized exchanges or financial institutions, can also reduce transaction processing costs.