Uniswap is a decentralized exchange that enables peer-to-peer market making. Uniswap is also a cryptocurrency whose symbol is (UNI). The Uniswap platform enables 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.1 The Uniswap blockchain is open source, meaning that anyone can view and contribute to the blockchain's code.
KEY TAKEAWAYS
The Uniswap platform can support the exchange of any digital token that adheres to the Ethereum technical standard known as ERC-20. Uniswap uses smart contracts, which are enabled by blockchain technology, to function as an automated market maker.3 Uniswap users can securely create liquidity pools, provide liquidity, and swap a variety of digital assets.
As a decentralized exchange, Uniswap uses a permissionless design. The Uniswap protocol is available for anyone to use, and the Uniswap platform has no ability to selectively restrict access. Anyone who chooses can use Uniswap to trade digital assets, provide liquidity, or create a new market in which to exchange a new pair of digital assets.3
The automation provided by smart contracts can make trading assets more efficient. Uniswap uses smart contracts to also avoid liquidity issues that traditionally affect centralized exchanges. The elimination of any rent-seeking third party, such as a centralized exchange or financial institution, can also reduce transaction processing fees.4