Uniswap is powered by smart contracts that run on the Ethereum blockchain, Polygon, Optimism, Arbitrum, Celo, and BNB Chain, all of which are working toward interoperability between dapps and networks.

Every transaction is completely secure, transparent, and immutable thanks to blockchain technology. In addition, Uniswap's code is open source, so anybody can really look at it and add to its turn of events.

How is Uniswap operated?

We must examine how the Uniswap exchange protocol generates liquidity in order to comprehend its operation. When you want to buy or sell an asset on a traditional centralized exchange, the exchange will match your order with someone on the other side of the trade. This transaction might take a few seconds, a few days, or nothing at all.

There is no order book on Uniswap. Instead, the protocol makes use of what is known as an automated market maker (AMM), which serves as a counterparty for all trades and provides liquidity. The Asset Market Maker (AMM) is a smart contract that stores a pool of assets and lets users trade them without a third party.

However, it is essential to keep in mind that the Uniswap DEX is constantly evolving. The protocol had three versions with significant updates released prior to 2022.

Each has altered the way the entire industry interacts with DeFi transactions and will continue to function indefinitely – as long as Ethereum is in existence. Read on for more information about each Uniswap version.

Uniswap v1 was the first decentralized Ethereum exchange to go live in 2018. Users were able to trade ETH and ERC20 tokens without the need for a third party for the first time.

Uniswap v1 revolutionized the DeFi industry, despite the fact that it is no longer the most widely used version. It established the foundation for what would become Uniswap and demonstrated the feasibility of decentralized exchanges.

In 2020, Uniswap v2, a complete redesign of the original exchange, went live. It made many changes to the protocol, like adding support for multiple assets, flash loans, and stakes.

One of the most important changes in v2 is liquidity pools. A liquidity pool is nothing more than a few tokens that a user has contributed to the Uniswap smart contract, which makes it possible for it to function, despite the fact that this may sound like a complicated concept.

For instance, if you need to trade some ETH for some MKR, then, at that point, somebody requirements to have gotten a few ETH and some MKR into Uniswap to empower this. People do this so they can pay a small transaction fee. These fees are then divided among all of the people who have added liquidity, resulting in a passive income for those who provide liquidity.

In Uniswap v1, liquidity providers required ETH and another ERC20 token; however, in v2, liquidity providers can now provide liquidity using two ERC20 tokens without requiring ETH. Although this appears to be a minor adjustment, it offers significantly more flexibility.

Streak advances on Uniswap v2

Different changes incorporate the capacity to utilize liquidity pools to make streak advances. Flash loans, which were made popular by the Aave protocol and allow users to quickly repay them, let them get access to high values of any ERC20 token in Uniswap for cheap. Even though this seems like a small detail, it is crucial to make the DeFi ecosystem as a whole more functional.

Cost prophets on Uniswap v2

At last, v2 has better cost prophets, which guarantees the costs of tokens in Uniswap are more precise and harder to control.

On the Uniswap blog, you can read about additional minor enhancements.

The most recent version of the protocol, Uniswap v3, was released in 2021 and is currently the most widely used.

It improves upon the foundations of v2 and includes the following new features:

On Uniswap v3, the introduction of concentrated liquidity, which enables liquidity providers (LPs) to contribute along specific price ranges, is one of the main features of this version. Subsequently, clients can place in range orders, which likewise worked on capital proficiency.

Different Expense Levels on Uniswap v3

Another significant change is that now, LPs can indicate different expense levels for their liquidity pool - 0.05%, 0.30%, and 1.00%. As a result, they are able to adjust margins in accordance with anticipated pair volatility.

Non-Fungible Liquidity on v3 This version of the protocol was also the first to combine the DeFi and non-fungible token (NFT) worlds. To put it another way, each position you hold in a liquidity pool becomes an NFT.

Uniswap v3 Launched on Other Networks Uniswap v3 innovated by launching itself on the Polygon network and Optimism, a layer-2 Ethereum solution. Previously, the exchange protocol had only been based on Ethereum. The Uniswap community made these decisions, which will benefit the protocol greatly in the future.

Uniswap v3 is still being worked on, and new features are constantly being added. The Uniswap blog is a good place to keep up with the most recent information.

Uniswap NFT Marketplace Aggregator On the back of the popularity of NFTs, Uniswap made the announcement in June 2022 that it would be purchasing the NFT Marketplace Aggregator Genie. This was a pivotal move for the blockchain sector.

Additionally, you will be able to trade cryptocurrencies and Ethereum-based NFTs with Uniswap beginning in late 2022.

Traders can get more listings at the best prices from major Web3 marketplaces using the Uniswap NFT marketplace aggregator.

The native token of the Uniswap protocol is known as the UNI token. It was developed with the intention of returning power to the community and decentralizing protocol governance. The UNI token did not become available until September 2020 with Uniswap v2, despite the fact that the protocol went live in 2018.

The DappRadar Token Explorer shows that the price of UNI reached its all-time high of $43.37 in May 2021 and its all-time low of $2 in September 2020.

Whoever holds UNI can cast a ballot or present their own proposition and take part in the convention's administration. Besides, holders of the UNI token get limits on exchanging charges. The more UNI you hold, the greater the markdown you'll get.

UNI tokens can also be staked in popular protocols like Compound to get a return.

How do I acquire the UNI token?

There are a few options for getting your hands on some UNI tokens. Yet, before that, you should make a computerized wallet to store your crypto, like MetaMask. For more details, see the video below.

Then, you can purchase UNI straightforwardly with fiat (genuine cash) or digital money on any confided in decentralized or brought together trade. Keeping your cryptographic money in your wallet (and not on a unified trade account) awards you genuine responsibility for resources. Your cryptography, not your keys.

You can likewise purchase UNI on Uniswap or utilizing the DappRadar Token Trade.

Uniswap, Uniswap Exchange, Uniswap login, the official Uniswap website, and the Uniswap website are additional methods for acquiring UNI. Thusly, you'll procure a part of the exchanging charges as a prize.

Last but not least, airdrops are another way to acquire UNI tokens. You can frequently obtain verified crypto airdrops for free at DappRadar.